Bon Air, Inc., purchased 70 percent (2,800 shares) of the outstanding voting stock of Creedmoor Corporation on January 1, 2007, for \($250,000\) cash. Creedmoor’s net assets on that date totaled \($230,000\), but this balance included three accounts having fair values that differed from their book values:

Prepare a worksheet to consolidate these two companies as of December 31, 2010. Because Bon Air acquired Creedmoor before the effective date of the acquisition method (2009), the purchase method is appropriate.

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Land Equipment (14-year life) Liabilities (10-year life). Book Value $ 30,000 Fair Value $ 40,000 50,000 118,000 (70,000) As of December 31, 2010, the two companies report the following balances: Revenues Operating expenses Investment income Net income Retained earnings, 1/1/10 Net income Dividends paid Retained earnings, 12/31/10 Current assets Investment in Creedmoor Corp. Land Buildings (net) Equipment (net) Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/10 Total liabilities and equities. Bon Air $ (694,800) 630,000 (44,200) $ (109,000) $ (760,000) (109,000) 68,000 (50,000) Creedmoor $(250,000) 180,000 -0- $ (70,000) $(260,000) (70,000) 10,000 $(320,000) $ (801,000) $ 72,000 $ 120,000 321,800 -0- 241,000 50,000 289,000 200,000 165,200 40,000 $ 1,089,000 $ (180,000) (50,000) $410,000 $ (50,000) (40,000) -0- (58,000) (801,000) (320,000) $(1,089,000) $(410,000)