Advanced Accounting; Chapter 3 Consolidations-Subsequent to the Date of Acquisition

You are to complete the worksheet below to consolidated the financial statements of the parent and subsidiary at 12/31/2018. Pig purchased Sig on 1/1/2018.

On January 1, 2018, Pig Corp. paid $765,000 to purchase 100% of the common stock of Sig Company.

On the date Pig acquired Sig (1/1/2018), the book value of Sig was $600,000. (Sig's Common Stock was $400,000, and Retained Earnings was $200,000 on the date of acquisition.)

On date of the acquisition Sig's Land was undervalued $30,000; Equipment (5 year life) was overvalued $20,000; Buildings (20 year life) were undervalued $80,000; and Patents (3 year life) were undervalued $36,000.

Part 1: Identify the component parts of the cost of the investment on the date of acquisition. Show your computations.

Part II: Show any analysis that would be helpful to update the account balances from the date of acquisition to the consolidation date.