Robinson Corporation purchased all the outstanding common stock of Hoffman Prepare consolidated Plastics, Inc. on December 31, 2014. Just before the purchase, the condensed balance worksheet and balance sheets of the two companies appeared as follows.

Robinson Corporation

$3,580,000 Current assets $1,480,000 Plant and equipment (net) 2,100,000 Current liabilities $ 578,000 Common stock 1,950,000 Retained earnings 1,052,000

$3,580,000 sheet when cost exceeds book value.

Hoffman Plastics, Inc. (LO 7)

$ 435,500 676,000

$1,111,500 92,500 525,000 494,000

$1,111,500 Robinson used current assets of $1,225,000 to acquire the stock of Hoffman Plastics. The excess of this purchase price over the book value of Hoffman Plastics’ net assets is determined to be attributable $86,000 to Hoffman Plastics’ plant and equipment and the remainder to goodwill.

Instructions

(a) Prepare the entry for Robinson’s acquisition of Hoffman Plastics, Inc. stock. Excess of cost over book value

(b) Prepare a consolidated worksheet at December 31, 2014.

(c) Prepare a consolidated balance sheet at December 31, 2014.