Case Study: Sludge Company
On January 1 2016, Pounder Company purchased 75% of Sludge Company for $500,000. Sludge Company’s stockholders’ equity on that date was equal to $600,000 and Sludge Company had 60,000 shares issued and outstanding on that date. Sludge Company Corporation sold an additional 15,000 shares of previously unissued stock on December 31, 2016.On January 1 2016, Pounder Company purchased 75% of Sludge Company for $500,000. Sludge Company’s stockholders’ equity on that date was equal to $600,000 and Sludge Company had 60,000 shares issued and outstanding on that date. Sludge Company Corporation sold an additional 15,000 shares of previously unissued stock on December 31,