Consolidated Balance Sheet Workpaper
On January 1, 2011, Perry Company purchased 8,000 shares of Soho Company’s common
stock for $120,000. Immediately after the stock acquisition, the statements of financial position
of Perry and Soho appeared as follows:
Assets Perry Soho
Cash $ 39,000 $ 19,000
Accounts receivable 53,000 31,000
Inventory 42,000 25,000
Investment in Soho Company 120,000
Plant assets 160,000 110,500
Accumulated depreciation—plant assets (52,000) (19,500)
` Total $362,000 $166,000

Liabilities and Owners’ Equity
Current liabilities $ 18,500 $ 26,000
Mortgage notes payable 40,000
Common stock, $10 par value 120,000 100,000
Other contributed capital 135,000 16,500
Retained earnings 48,500 23,500
` Total $362,000 $166,000

Required:
A. Calculate the percentage of Soho acquired by Perry Company. Prepare a schedule to
compute the difference between book value of equity and the value implied by the purchase
price. Any difference between the book value of equity and the value implied by the
purchase price relates to subsidiary plant assets.
B. Prepare a consolidated balance sheet workpaper as of January 1, 2011.
C. Suppose instead that Perry acquired the 8,000 shares for $20 per share including a $5 per
share control premium. Prepare a computation and allocation of difference schedule.