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The consolidated balance sheet of Treecreeper Corporation and Ants Farm, its 90% owned subsidiary, as of December 31, 2005, contains the following accounts and balances: Treecreeper Corporation and Subsidiary Consolidated Balance Sheet at December 31, 2005 Balances Cash $ 19,000 Accounts receivable-net 70,000 Inventories 110,000 Other current assets 85,000 Plant assets-net 290,000 Goodwill from consolidation 39,000 $ 613,000 Accounts payable $ 73,000 Other liabilities 70,000 Capital stock 350,000 Retained earnings 80,000 Minority interest 40,000 $ 613,000 Treecreeper Corporation acquired its 90% interest in Ants Farm on January 1, 2005, when Ants Farm had $150,000 of Capital Stock and $70,000 of Retained Earnings. Ants Farm’s net assets had fair values equal to their book values when Treecreeper acquired its interest. No changes have occurred in the amount of outstanding stock since the date of the business combination. Treecreeper uses the equity method of accounting for its investment. Required: Determine the following amounts:

1. The balance of Treecreeper's Capital Stock and Retained Earnings accounts at December 31, 2005.

2. Cost of Treecreeper's purchase of Ants Farm on January 1, 2005.

3. Ants Farms’s stockholders' equity on December 31, 2005.

4. Treecreeper’s Investment in Ants Farm account balance at December 31, 2005.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92336549

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