Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2010 c. If the parent uses the equity method, what consolidation entries would be used on worksheet? 33. On January 1, 2018, Brooks Corporation exchanged

image text in transcribed
2010 c. If the parent uses the equity method, what consolidation entries would be used on worksheet? 33. On January 1, 2018, Brooks Corporation exchanged $1.183.000 fair-value consideration for all of the outstanding voting stock of Chandler, Inc. At the acquisition date, Chandler had a book value equal to ST.105,000. Chandler's individual assets and liabilities had fair values equal to their respec tive book values except for the patented technology account, which was undervalued by $204,000 with an estimated remaining life of six years. The Chandler acquisition was Brooks's only business combination for the year. In case expected synergies did not materialize, Brooks Corporation wished to prepare for a potential future spin-off of Chandler, Inc. Therefore, Brooks had Chandler maintain its separate incorporation and independent accounting information system as elements of continuing value. On December 31, 2018, each company submitted the following financial statements for consoli- dation Dividends were declared and paid in the same period. Parentheses indicated credit balances Brooks Corp. Chandler Inc. Income Statement Revenues Cost of goods sold.......... Gain on bargain purchase. ......... Depreciation and amortization Equity earnings from Chandier... Net income. $ (587,000) 203.000 $ (640,000) 255,000 (126,000) 150,000 (199.000) $ (560,000 -O- 151,000 $ (233,000 $(1.835,000) (560,000) 100,000 $12.295,000 $ (805,000) (233.000) 40.000 $ 1998,000) Statement of Retained Earnings Retained earnings, 1/1.. Net income (above) Dividends declared.. Retained earnings, 12/31.. Balance Sheet Current assets... Investment in Chandler .. Trademarks Patented technology ... Equipment Total assets Liabilities Common stock Retained earnings, 12/31 Total liabilities and equity.. $ 432.000 -O- 221.000 410,000 $ 343.000 1,468,000 134,000 395,000 693,000 $ 3.033.000 $ (203.000) (535.000) (2.295,000) $(3.033.000 341,000 $ 1.404,000 $ (106.000) (300,000) (998.000) $(1.404,000 a. Show how Brooks determined the following account balances: Gain on bargain purchase. Earnings from Chandler. Investment in Chandler. 6. Prepare a December 31, 2018, consolidated worksheet for Brooks and Chandler

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing A Practical Approach

Authors: Fiona Campbell, Robyn Moroney, Jane Hamilton, Valerie Warren

2nd Canadian edition

9781118377901, 1118377907, 1119048095, 978-1118849415

More Books

Students also viewed these Accounting questions

Question

4. Explain why strategic planning is important to all managers.

Answered: 1 week ago

Question

Main effect of A; no main effect of B; interaction

Answered: 1 week ago

Question

What is the central issue of the situation facing the organization?

Answered: 1 week ago