Question
Adams Corporation acquired 90 percent of the outstanding voting shares of Barstow, Inc., on December 31, 2019. Adams paid a total of $603,000 in
Adams Corporation acquired 90 percent of the outstanding voting shares of Barstow, Inc., on December 31, 2019. Adams paid a total of $603,000 in cash for these shares. The 10 percent noncontrolling interest shares traded on a daily basis at fair value of $67,000 both before and after Adams's acquisition. On December 31, 2019, Barstow had the following account balances: Current assets Land Buildings (10-year remaining life) Equipment (5-year remaining life) Patents (10-year remaining life) Notes payable (due in 5 years) Common stock Retained earnings, 12/31/19 $ 160,000 120,000 Book Value Fair Value $ 160,000 150,000 220,000 200,000 160,000 200,000 0 (200,000) 50,000 (180,000) (180,000) (280,000) December 31, 2021, adjusted trial balances for the two companies follow: Debits Current assets Land Buildings Equipment Investment in Barstow, Inc. Cost of goods sold Depreciation expense Interest expense Dividends declared Adans Corporation Barstow, Inc. $ 610,000 $ 250,000 380,000 150,000 490,000 250,000 873,000 150,000 702,000 e 480,000 90,000 100,000 55,000 40,000 15,000 110,000 70,000 Activate Windows
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