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On January 1, 2018, Brooks Corporation exchanged $1136,500 fair-value consideration for all of the outstanding voting stock of Chandler, Inc. Al the acquisition date, Chandler had a book value equal to $1,032 500 Chandier's individual assets and Babilities had ar values equal to ter respective book values except for the patented technology account, which was undeveled by $234.000 with on estimated remaining life of six years. The Chander acquisition was Brooks's only business combination for the yea In case expected synmergles did not materialtre, Drooks Corporation wished to prepare for a poteniial future spin off of Chandlet, Inc Therefore, Brooks had Chandlermaintain its separate incorporation and independent accounting information system as elements of continuing value. On December 31, 20each company submitted the following financial statements for consolidation Dividends were declared and paid in the same period Income Statement (759,500) (553,088) $ ( 216,800 (13e,e00) 141,000 (178,999) (702,500) Cost of goods sold Gain on bargain purchase Depreciation and amortization Equity earnings from Chandler 178,808 166,00 (209,800) Net income Statement of Retained Earnings Retained earnings, 1/1 Net income (above) Dividends declared $(1,815,00) (782, 5e0) (732,5ee) (209,e00) e,080 $(2, 317,580) (891,580) Retained earnings, 12/31 Balance Sheet Current assets $ 504,000 $ 303,500 1,386,580 126,000 361,000 Investnent in Chandler Tradenarks 294,e00 428,000 356,080 Patented technology Equipment 660,800 Total assets 3,837,580 1,373,580 (185,00) (182,e00) (300,080) ()(891,500) $(3,837,580 $(1,373,5e0) Liabilities Common stock (535,880) Retained earnings, 12/31 2.317.500 Total liabilities and equity Note: Parentheses indicate a credit balance a. Determine the following account balances: . Gain on bargain purchase . Earnings from Chandler. . Investment in Chandler. b. Prepare a December 31, 2018, consolidated worksheet for Brooks and Chandler. On January 1, 2018, Brooks Corporation exchanged $1,136,500 fair-value consideration for all of the outstanding voting stock of Chandler, Inc. At the acquisition date, Chandler had a book value equal to $1,032,500. Chandler's individual assets and liabilities hacd fair values equal to their respective book values except for the patented technology account, which was undervalued by $234,000 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 consolidation. Dividends were declared and paid in the same period
