Adams Corporation acquired 90 percent of the outstanding voting shares of Barstow, Inc., on December 31, 2009. Adams paid a total of $603,000 in cash for these shares. The 10 percent non¬ controlling interest shares traded on a daily basis at fair value of $67,000 both before and after Adams’s acquisition. On December 31, 2009, Barstow had the following account balances:

Current assets. LO6 Land.

Buildings (10-year life) .... Equipment (5-year life) . . .

Patents (10-year life).

Notes payable (5-year life) .

Common stock.

Retained earnings, 12/31/09 Book Value Fair Value

$ 160,000

$ 160,000 120,000 150,000 220,000 200,000 160,000 200,000

-0-

50,000

(200,000)

(180,000)

(180,000)

—

(280,000)

—

December 31, 2011, adjusted trial balances for the two companies follow:
Adams Barstow, Corporation Inc.
Debits Current assets.
$ 610,000 $ 250,000 Land.
380,000 150,000 Buildings.
490,000 250,000 Equipment.
873,000 150,000 Investment in Barstow, Inc. . . .
702,000 -0-
Cost of goods sold .
480,000 90,000 Depreciation expense.
100,000 55,000 Interest expense.
40,000 15,000 Dividends paid.
110,000 70,000 Total debits.
$3,785,000 $1,030,000 Credits Notes payable.
$ 860,000 $ 230,000 Common stock.
510,000 180,000 Retained earnings, 1/1/11 . . . .
1,367,000 340,000 Revenues.
940,000 280,000 Investment income ..
108,000 -0-
Total credits.. .
$3,785,000 $1,030,000

a. Prepare schedules for acquisition-date fair-value allocations and amortizations for Adams’s investment in Barstow.

b. Determine Adams’s method of accounting for its investment in Barstow. Support your answer with a numerical explanation.

c. Without using a worksheet or consolidation entries, determine the balances to be reported as of December 31, 2011, for this business combination.

d. To verify the figures determined in requirement (c), prepare a consolidation worksheet for Adams Corporation and Barstow, Inc., as of December 31, 2011.