Maurice Tutor
$15/per page/Negotiable
Subsidiary Acquired with Bonds
Byte Computer Corporation acquired 75 percent of Nofail Software Company’s stock on January 2, 20X3, by issuing bonds with a par value of $50,000 and a fair value of $67,500 in exchange for the shares. Summarized balance sheet data presented for the companies just before the acquisition are as follows:
| Â |
Byte Computer Corporation |
Nofail Software Company |
|||
| Â |
Book Value |
Fair Value |
Book Value |
Fair Value |
|
|
Cash |
$200,000 |
$200,000 |
$ 50,000 |
$ 50,000 |
|
|
Other Assets |
400,000 |
400,000 |
120,000 |
120,000 |
|
|
Total Debits |
$600,000 |
 |
$170,000 |
 | |
|
Current Liabilities |
$100,000 |
100,000 |
$ 80,000 |
80,000 |
|
|
Common Stock |
300,000 |
 |
50,000 |
 | |
|
Retained Earnings |
200,000 |
 |
40,000 |
 | |
|
Total Credits |
$600,000 |
 |
$170,000 |
 | |
Required
Prepare a consolidated balance sheet immediately following the acquisition.