question archive Scott Corporation purchased 100% of Nina Inc
Scott Corporation purchased 100% of Nina Inc
Subject:AccountingPrice: Bought3
Scott Corporation purchased 100% of Nina Inc. for $128,000 on January 1, 20X7. Scott paid a premium of $100,000 in excess of Book Value of Nina. The premium should be assigned to Goodwill except for $20,000 assigned to equipment with a 10-year remaining life.
Below are the Adjusted Trial Balances of the Two Companies:
| Elimination Entries | Combined Worksheet |
| Cash | $ 19,500 | $ 21,000 |
| Accounts Receivable | 70,000 | 12,000 |
| Inventory | 90,000 | 25,000 |
| Land | 30,000 | 15,000 |
| B&E (net) | 205,000 | 110,000 |
| Investment in Nina | 134,000 | |
| Accounts payable | (45,000) | (16,000) |
| Wages Payable | (17,000) | (9,000) |
| Notes Payable | (150,000) | (50,000) |
| Common stock | (200,000) | (60,000) |
| Retained earnings | (102,000) | (40,000) |
| Sales | (260,000) | (180,000) |
| CofGS | 125,000 | 110,000 |
| Wage expense | 42,000 | 27,000 |
| Depreciation expense | 25,000 | 10,000 |
| Interest expense | 12,000 | 4,000 |
| Other Explenses | 13,500 | 5,000 |
| Income from subsidiary (Nina) | (22,000) | |
| Divdends Declared | 30,000 | 16,000 |
Prepare all elimination entries and complete worksheet.
