Subsidiary Acquired for Cash:
Fineline Pencil Company purchased 100 percent of Smudge Eraser Corporation's stock on January 2,20X3, for $150,000 cash. Summarized balance sheet data for the companies on December 31, 20X2, are
as follows:
Fineline Pencil Smudge Eraser
Company Corporation
Book Value Fair Value Book Value Fair Value
Cash $200,000 $200,000 $ 50,000 $ 50,000
Other Assets 400,000 650,000 120,000 180,000
Total Debits $600,000 $170,000
Current Liabilities $100,000 $100,000 $ 80,000 $ 80,000
Common Stock 300,000 50,000
Retained Earnings 200,000 40,000
Total Credits $600,000 $170,000
Required: Prepare a consolidated balance sheet immediately following the acquisition.