Consolidation: Adjustments to the Balance Sheet
Presented below are condensed balance sheets for the ASAP Company and its wholly owned subsidiary, BYOB Inc., at December 31, 1999 (dollars in millions):
|
ASAP Company |
BYOB Inc. |
|
|
Current assets |
$ 30 |
$ 55 |
|
Noncurrent assets |
210 |
95 |
|
Total |
$240 |
$150 |
|
Liabilities |
$110 |
$ 85 |
|
Shareholders’ equity |
130 |
65 |
|
Total |
$240 |
$150 |
Required
Explain how each of the following items would affect your preparation of a consolidated balance sheet for ASAP and BYOB:
a. The noncurrent assets of ASAP include its investment in BYOB at a value of $65 million.
b. The current assets of BYOB include an account receivable from ASAP of $9 million.
c. The noncurrent assets of BYOB include land purchased from ASAP for $25 million. The cost of the land to ASAP was $7 million.
d. Prepare a consolidated balance sheet for ASAP Company on December 31, 1999.
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