a. show how adora derived its dec 31, 2018, Investment in Alvah account balance

b. prepare a consolidated worksheet for adora and alvah as of dec 31, 2018

cel AABBcco Title Subtitle Subtle Em Emphasis Intense E. Strong Quote Intense Subtle Ref. Inte Styles Problem 4: BONUS QUESTION 10 points On January 1, 2017, Adora Corporation acquired 100 percent of the outstanding voting stock of Alvah Corporation for $2.099,600 cash. On the acquisition date, Alvah had the following balance sheet: Cash $ 152,000 Accounts payable $ 184,000 Accounts receivable 137,000 Long-term debt 985.000 Land 730,000 Common stock 1.049,000 Equipment (net) 1,942,000 Retained earnings 743,000 $2,961,000 $2,961,000 At the acquisition date the following allocation was prepared: Fair value of consideration transferred Book value aequired Excess fair value over book value To in-process research and development To equipment 18-year remaining life) TO goodwill indefinite lite) $2,099,600 1,792,000 307, 600 $ 44,000 133, 600 177,600 $ 130,000 Although at acquisition date Adora had expected $44,000 in future benefits from Alvah's in process research and development project, by the end of 2017, it was apparent that the research project was a failure with no future economic benefits. On December 31, 2018. Adora and Alvah submitted the following trial balances for selconsolidation. There were no intra entity payables on that date Adora Alva Sales $ (3,795, 200) $(1,166, 250) Cost of goods sold 1,810,000 745,000 Depreciation expense 335,000 147.000 Other operating expenses 223,000 37,250 Subsidiary income (220, 300) 0 Net income $ (1,647,500) $ (237.000) Retained earnings 1/1/18 $ (3,052,500) $ (936, 000) Net income (1,647, 500) (237.000) Dividends declared 300,000 26,225 Retained earnings 12/31/18 S (4,400,000) $(1,146,775) Cash I $ 110,025 S 6,275 Accounts receivable 937.000 164,000 Inventory 908,000 613,000 Investment in Gaugerite 2,125,975 Land 3,120,000 760,000 Equipment (het) S. 180.000 1,942,500 Goodwill 354,000 0 Total assets $ 13,035,000 $ 3,485,775 Accounts payable $ (220,000) $ (455.000) Long-term debt $ (3,265,000) $ 1835,000) Common stock (5,150,000) 11.049,000) Retained earnings 12/31/18 (1,100,000) (1, 116, 775) Total liabilities and equity $(13,035, 000) $ (3,485,775)