a consolidated balance sheet worksheet and
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Zenith Corporation acquired 70 percent of Down Corporation’s common stock on December 31, 20X4, for $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:
Item |
Zenith Corporation |
Down Corporation |
Cash |
$ 50,300 |
$ 21,000 |
Accounts Receivable |
90,000 |
44,000 |
Inventory |
130,000 |
75,000 |
Land |
60,000 |
30,000 |
Buildings & Equipment |
410,000 |
250,000 |
Less: Accumulated Depreciation |
(150,000) |
(80,000) |
Investment in Down Corporation Stock |
102,200 |
|
Total Assets |
$692,500 |
$340,000 |
Accounts Payable |
$152,500 |
$ 35,000 |
Mortgage Payable |
250,000 |
180,000 |
Common Stock |
80,000 |
40,000 |
Retained Earnings |
210,000 |
85,000 |
Total Liabilities & Stockholders’ Equity |
$692,500 |
$340,000 |
At the date of the business combination, the book values of Down’s assets and liabilities approximated fair value except for inventory, which had a fair value of $81,000, and buildings and equipment, which had a fair value of $185,000. At December 31, 20X4, Zenith reported accounts payable of $12,500 to Down, which reported an equal amount in its accounts receivable.
Required:
- Give the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business combination.
- Prepare a consolidated balance sheet worksheet.
- Prepare a consolidated balance sheet in good form.

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