(Estimated Time 45 to 65 Minutes) Following are the account balances of Miller Company and Rich mond Company as of December 31 The fair values of Richmond Company's assets and liabilities are also listed ve Miller Company Book Values 12 31 Richmond Company Book Values 12 31 Richmond Company Fair Values 12 31 Cash Receivables Inventory Buildings and equipment (net) Unpatented technology In process research and development $ 600,000 $ 200,000 200,000 290,000 820,000 900,000 500,000 100,000 (200,000) 900,000 1,100,000 9,000,000 300,000 600,000 800,000 0 (400,000) (200,000) (3400,000) (1 100,000)(1,100,000) 600,000 Notes payable Totals $ 7,800,000 $(2,000,000) $1,510,000 Common stock $20 par value Common stock $5 par value Additional paid in capital Retained earnings, 1 1 Revenues Expenses (900,000) (2,300,000) (6,000,000) 3,400,000 $(7,800,000 $ (220,000) (100,000) (130,000) (900,000) 750,000 ) $(600,000) Note Parentheses indicate a credit balance Additional Information (not reflected in the preceding figures) On December 31, Miller issues 50,000 shares of its $20 par value common stock for all of the out standing shares of Richmond Company As part of the acquisition agreement, Miller agrees to pay the former owners of Richmond $250,000 if certain profit projections are realized over the next three years Miller calculates the acquisition date fair value of this contingency at $100,000 In creating this combination, Miller pays $10,000 in stock issue costs and $20,000 in accounting and legal fees Required a Miller's stock has a fair value of $32 per share Using the acquisition method 1 Prepare the necessary journal entries if Miller dissolves Richmond so it is no longer a separate legal entity 2 Assume instead that Richmond will retain separate legal incorporation and maintain its own accounting systems Prepare a worksheet to consolidate the accounts of the two companies b If Miller's stock has a fair value of $26 per share describe how the consolidated balances would dif fer from the results in requirement (a)

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(Estimated Time  45 to 65 Minutes) Following are the account balances of Miller Company and Rich  mond Company as of December 31  The fair values of Richmond Company's assets and liabilities are also listed  ve Miller Company Book Values 12 31 Richmond Company Book Values 12 31 Richmond Company Fair Values 12 31 Cash Receivables Inventory Buildings and equipment (net) Unpatented technology In process research and development  $ 600,000 $ 200,000 200,000 290,000 820,000 900,000 500,000 100,000 (200,000) 900,000 1,100,000 9,000,000 300,000 600,000 800,000  0 (400,000) (200,000) (3400,000) (1 100,000)(1,100,000) 600,000 Notes payable Totals $ 7,800,000 $(2,000,000) $1,510,000 Common stock $20 par value Common stock $5 par value Additional paid in capital Retained earnings, 1 1 Revenues Expenses (900,000) (2,300,000) (6,000,000) 3,400,000 $(7,800,000 $ (220,000) (100,000) (130,000) (900,000) 750,000 ) $(600,000) Note  Parentheses indicate a credit balance  Additional Information (not reflected in the preceding figures)   On December 31, Miller issues 50,000 shares of its $20 par value common stock for all of the out  standing shares of Richmond Company  As part of the acquisition agreement, Miller agrees to pay the former owners of Richmond $250,000 if certain profit projections are realized over the next three years  Miller calculates the acquisition  date fair value of this contingency at $100,000 In creating this combination, Miller pays $10,000 in stock issue costs and $20,000 in accounting and legal fees    Required a  Miller's stock has a fair value of $32 per share  Using the acquisition method  1  Prepare the necessary journal entries if Miller dissolves Richmond so it is no longer a separate legal entity 2  Assume instead that Richmond will retain separate legal incorporation and maintain its own accounting systems  Prepare a worksheet to consolidate the accounts of the two companies  b  If Miller's stock has a fair value of $26 per share  describe how the consolidated balances would dif  fer from the results in requirement (a)

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(Estimated Time: 45 to 65 Minutes) Following are the account balances of Miller Company and Rich- mond Company as of December 31. The fair values

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