Constructing the Consolidated Balance Sheet at Acquisition On January 1 of the current year, Healy Company purchased all of the common shares of Miller Company for $500,000 cash. Balance sheets of the two firms immediately after the acquisition follow: During purchase negotiations, Miller's plant assets were appraised at $425,000 and all of its remaining assets and liabilities were appraised at values approximating their book values. Healy also concluded that an additional $85,000 (for goodwill) demanded by Miller's shareholders was warranted because Miller's earning power was better than the industry average.

Prepare the consolidating adjustments and the consolidated balance sheet at acquisition.

Use negative signs with consolidating adjustment answers, when appropriate.

	Healy Company	Miller Company	Consolidating Adjustments	Consolidated Balance Sheet
Current assets	$1,400,000	$80,000	Answer	Answer
Investment in Miller	500,000	-	Answer	Answer
Plant assets, net	3,000,000	410,000	Answer	Answer
Goodwill	-	-	Answer	Answer
Total assets	$4,900,000	$490,000		Answer
Liabilities	$ 700,000	$ 90,000	Answer	Answer
Contributed capital	3,200,000	360,000	Answer	Answer
Retained earnings	1,000,000	40,000	Answer	Answer
Total liabilities & stockholders' equity	$4,900,000	$490,000		Answer

Constructing the Consolidated Balance Sheet at Acquisition On January 1 of the current year, Healy Company purchased all of the common shares of Miller Company for $500,000 cash. Balance sheets of the two firms immediately after the acquisition follow: During purchase negotiations, Miller's plant assets were appraised at $425,000 and all of its remaining assets and liabilities were appraised at values approximationg their book values. Healy also concluded that an additional $85,000 (for goodwill) demanded by Miller's shareholders was warranted because Miller's earning power was better than the industry average. Prepare the consolidating adjustments and the consolidated balance sheet at acquisition. Use negative signs with consolidating adjustment answers, when appropriate Healy Miller consolidating Consolidated Company Company Adjustments Balance Sheet Current assets $1,400,000 $80,000 Investment in Miller 500,000 Plant assets, net 3,000,000 410,000 Goodwill Total assets $4,900,000 $490,000 $ Liabilities $ 700,000 $ 90,000 $ Contributed capital 3,200,000 360,000 Retained earnings 1,000,00 40,000 Total liabilities & stockholders' equity $4,900,000 $490,000 $