Prepare a consolidated balance sheet for pen corporation

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Reference no: EM131822719

Question: Prepare a consolidated balance sheet for Pen Corporation and Subsidiary at December 31, 2011.

Prepare a consolidated balance sheet at acquisition and compute consolidated net income one year later

On December 31, 2011, Pen Corporation purchased 80 percent of the stock of Sut Company at book value. The data reported on their separate balance sheets immediately after the acquisition follow. At December 31, 2011, Pen Corporation owes Sut $10,000 on accounts payable. (All amounts are in thousands.)

	Pen	Sut
Assets	$ 64	$ 36
Cash	90	68
Accounts receivable	286	112
Inventories	400	350
Investment in Sut	760	$566
Equipment-net	$1,600	$ 66
Liabilities and Stockholders' Equity	$ 80	300
Accounts payable	920	200
Common stock, $20 par	600	$566
Retained earnings	$1,600

Required: 1. Prepare a consolidated balance sheet for Pen Corporation and Subsidiary at December 31, 2011.

2. Compute consolidated net income for 2012 assuming that Pen Corporation reported separate income of $340,000 and Sut Company reported net income of $180,000. (Separate incomes does not include income from the investment in Sut.)

Reference no: EM131822719

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