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Pappy Corp and Sonny, Inc. have entered into negotiations leading to a possible business combination. As of December 31, 2017, Sonny, Inc. condensed...

Pappy Corp and Sonny, Inc. have entered into negotiations leading to a possible business combination.

As of December 31, 2017, Sonny, Inc. condensed balance sheet was as follows:


Assets

Cash 375,000

Receivables (net) 1,125,000

Inventories 1,687,500

Prepayments 675,000

Noncurrent assets 3,375,000

Total assets 7,237,500

Liabilities and

stockholders' equity

Current payables 3,000,000

Capital stock; (par value of

20) 1,000,000

Retained earnings 3,237,500

Total equities 7,237,500


Sonny, Inc.'s inventory has a fair value of $2,092,500, its noncurrent assets, net of depreciation, approximated $3,847,500, its

current payables were valued at $3,225,000. Initially, Pappy Corp offered to acquire all of Sonny, Inc.'s stock for $4,347,500.

However, 25% of Sonny, Inc.'s stockholders objected, because they felt that the purchase price should reflect about $240,000

of goodwill.Ultimately, Pappy Corp acquired 75% of Sonny, Inc.'s outstanding stock for $100 per share.


After the acquisition was completed on Dec 31, 2017, the following balance sheet was prepared for Pappy Corp:


Assets

Cash 937,500

Receivables (net) 1,500,000

Inventories 1,687,500

Prepayments 1,125,000

Investment in securities 3,750,000

Noncurrent assets 30,000,000

Total assets 39,000,000

Liabilities and

stockholders' equity

Current payables 15,000,000

Capital stock; (par value of

15) 7,500,000

Retained earnings 16,500,000

Total equities 39,000,000


FMV BV FMV-BV

Cash  $        375,000     375,000 $0

Receivables (net)       1,125,000         1,125,000 -

Inventories      2,092,500          1,687,500       405,000

Prepayments          675,000             675,000                   -  

Noncurrent assets     3,847,500         3,375,000       472,500

Current payables     (3,225,000)       (3,000,000)     (225,000)  



i need help with creating the consolidated balance sheet working paper and the formal consolidated balance sheet

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