SOAL 1

On January 2, 2013 Piron Corporation issued 100,000 new shares of its $5 par value common stock
valued at $19 a share for all of Seana Corporation's outstanding common shares. Piron paid $15,000 to
register and issue shares. Piron also paid $20,000 for the direct combination costs of the accountants.
The fair value and book value of Seana's identifiable assets and liabilities were the same. Summarized
balance sheet information for both companies just before the acquisition on January 2, 2013 is as
follows:

Piron Seana
Cash $150,000 $120,000
Inventories 320,000 400,000
Other current assets 500,000 500,000
Land 350,000 250,000
Plant assets-net 4,000,000 1,500,000
Total Assets $5,320,000 $2,770,000

Accounts payable $1,000,000 $300,000

Notes payable 1,300,000 660,000
Capital stock, $5 par 2,000,000 500,000
Additional paid-in capital 1,000,000 100,000
Retained Earnings 20,000 1,210,000
Total Liabilities & Equities $5,320,000 $2,770,000

Required:
1. Prepare Piron's general journal entry for the acquisition of Seana, assuming that Seana survives
as a separate legal entity.
2. Prepare Piron's general journal entry for the acquisition of Seana, assuming that Seana will
dissolve as a separate legal entity.

SOAL 2
Parrot Inc. acquired an 85% interest in Sparrow Corporation on January 2, 2014 for $42,500 cash when
Sparrow had Capital Stock of $15,000 and Retained Earnings of $25,000. Sparrow's assets and
liabilities had book values equal to their fair values except for inventory that was undervalued by
$2,000. Balance sheets for Parrot and Sparrow on January 2, 2014, immediately after the business
combination, are presented in the first two columns of the consolidated balance sheet working papers.
Required:
Complete the consolidation balance sheet working papers for Parrot and subsidiary at January 1,
2014.
SOAL 3
Packo Company acquired all the voting stock of Sennett Corporation on January 1, 2014 for $90,000
when Sennett had Capital Stock of $50,000 and Retained Earnings of $8,000. The excess of fair value
over book value was allocated as follows: (1) $5,000 to inventories (sold in 2014), (2) $16,000 to
equipment with a 4-year remaining useful life (straight-line method of depreciation) and (3) the
remainder to goodwill.

Financial statements for Packo and Sennett at the end of the fiscal year ended December 31, 2015 (two
years after acquisition), appear in the first two columns of the partially completed consolidation
working papers. Packo has accounted for its investment in Sennett using the equity method of
accounting.

Required:
Complete the consolidation working papers for Packo Company and Subsidiary for the year ending
December 31, 2015.
Jawaban Soal 1

Piron’s General Journal Entries if Seana survives as a separate legal entity

Date Account Title and Explanation Debit Credit

Investment in Seana $1,900,000
Common Stock $500,000
Additional Paid in Capital $1,400,000
(Entry of acquisition)
Investment Expenses $20,000
Additional Paid in Capital $15,000
Additional Paid in Capital $35,000
(Expenses related to investment)

Piron’s general journal entry if Seana dissolves as a separate legal entity

Date Account title and Explanation Debit Credit

Cash $85,000
Inventories $400,000
Other Current Assets $500,000
Land $250,000
Plant Net Asset $1,500,000
Goodwill $90,000
Investment Expenses $20,000
Accounts Payable $300,000
Notes Payable $660,000
Common Stock $500,000
Additional Paid in Capital $1,385,000
(Entry of acquisition)
Jawaban Soal 2

Elimination Consolidated
Parrot Sparrow Debit Credit Balance Sheet
ASSETS
Cash 63,500 4,000 67,500
Account Receivable 75,000 9,000 84,000
Inventories 39,000 10,000 2,000 51,000
Plant Assets-Net 170,000 35,000 205,000
Investment in Sparrow 42,500 42,500 0
Goodwill 8,000 8,000
Total Assets 390,000 58,000 415,500

EQUITIES AND
LIABILITIES
Payables 120,000 18,000 138,000
Capital Stock 100,000 15,000 15,000 100,000
Retained Earnings 170,000 25,000 25,000 170,000
Non-Controlling 7,500 7,500
Interest

Total Equities and 390,000 58,000 50,000 50,000 415,500

Liabilities
Jawaban Soal 3:

Eliminations
Packo Senett Consolidated
Debit Credit
Income 206,000 60,000 266,000
statement sales
Income from 8,000 A 8,000
Sennett
Cost of sales (150,000) (30,000) (180,000)
Other (38,000) (18,000) C 4,000 (60,000)
Expenses
Net Income 26,000 12,000 26,000
Packo 24,000 24,000
Retained
earnings 1/1
Sennett 10,000 B 10,000
Retained
earnings 1/1
Add: Net 26,000 12,000 26,000
income
Less: Dividens (20,000) (4,000) A (4,000) (20,000)
Retained 30,000 18,000 30,000
earnings 12/31
BALANCE
SHEET
Other current 10,000 7,000 17,000
assets
Inventories 21,000 15,000 36,000
Land 11,000 6,000 17,000
Equipment 64,000 55,000 B 12,000 C 4,000 127,000
and building
net
Investment in 87,000 A 4,000
Sennett Corp
B 83,000
Goodwill B 11,000 11,000
TOTAL ASSET 193,000 83,000 208,000

Liabilities and
equities
Liabilities 63,000 15,000 78,000
Capital stock 100,000 50,000 B 50,000 100,000
Retained 30,000 18,000 30,000
Earnings
TOTAL 193,000 83,000 95,000 95,000 208,000
LIABILITIES &
EQUITY