Ping Corporation paid $300,000 cash for 80% of the outstanding common stock of Spring Company on January 1, 2019.
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 ­­­­Ping Corporation paid $300,000 cash for 80% of the outstanding common stock

of Spring Company on January 1, 2019. There was no control premium and the fair value of the noncontrolling interest was $75,000 on January 1, 2019. Differences between book value and fair value of the net identifiable assets of Spring Company on January 1, 2019, were limited to the following:

                                                                    Book value       Fair value          

           Inventories                                         $ 20,000         $ 31,000                       

           Equipment (net)                                   180,000           173,000                       


Required:

(i) Prepare the working paper elimination entries E and R (in journal entry format) for Ping Corporation and subsidiary on January 1, 2019.          


(ii) Complete the following working paper:

Working paper for consolidated balance sheet on date of business combination, January 1, 2019    

           Ping   Spring Adjustments & Eliminations                 Consolidated

       Dr (Cr)     Dr (Cr)           Debits Credits Dr (Cr)

Cash      50,000 30,000                         

Inventories       140,000 20,000                         

Investment in Spring    300,000                                   

                                               

Equipment (net) 460,000 180,000                       

                                               

Accounts payable         -300,000   -110,000                                  

Common stock  -200,000    -40,000                        

Add. paid-in capital      -300,000     -20,000                        

Retained earnings       -150,000     -60,000                        

                                              

                                               

      Total           0         0      

           

                

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