Problem: Blue Corporation acquired controlling ownership of Skyler Corporation on December 31, 20X3, and a consolidated balance sheet was prepared immediately. Partial balance sheet data for the two companies and the consolidated entity at that date follow:
During 20X3, Blue provided engineering services to Skyler and has not yet been paid for them. There were no other receivables or payables between Blue and Skyler at December 31, 20X3.
Required
1. What is the amount of unpaid engineering services at December 31, 20X3, on work done by Blue for Skyler?
2. What balance in accounts receivable did Skyler report at December 31, 20X3?
3. What amounts of wages payable did Blue and Skyler report at December 31, 20X3?
4. What was the fair value of Skyler as a whole at the date of acquisition?
5. What percentage of Skyler’s shares were purchased by Blue?
6. What amounts of capital stock and retained earnings must be reported in the consolidated balance sheet?