Father Inc, buys 80 percent of the outstanding common stock of Sam Corporation on January 1, 2009, for $680,000 cash. At the acquisition date, Sam's total fair value was assessed at $850,000 although Sam's book value was only $600,000. Also several individual items on Sam's financial records had fair values that differed from their book values as follows:

Land $60,000 BV $225,0000 FV

Buildings & Equipment (10 yr remaining life) $275,000 BV $250,000 FV

Copyright (20 yr life) $100,000 BV $200,000 FV

Notes payable (due in 8 yrs) ($130,000) BV ($120,000) FV

For internal reporting purposes, Father Inc. employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2009, for both companies. Using the acquisition method, determine consolidated balances for this business combination (through either individual computations or the use of a worksheet).

Revenues $(1,360,000) Father Co $(540,000) Sam Co

Cost of Goods Sold $700,000 (Father Co) $385,000 (Sam Co.)

Depreciation Expense $260,000 (Father Co) $10,000 (Sam Co)

Amortization Expense $0 (Father Co) $5,000 (Sam Co.)

Interest Expense $44,000 (Father Co) $5,000 (Sam Co)

Equity in income of Sam $(105,000) (Father Co) $0 (Sam Co)

Net Income $(461,000) (Father Co) $(135,000) (Sam Co)

Retained Earnings 1/1/09 $(1,265,000) (Father Co) $(440,000) (Sam Co

Net Income (above) $(461,000) (Father Co) $(135,000) (SAm Co)

Dividends paid $260,000 (Father Co) $65,000 (Sam Co)

Retained Earnings 12/31/09 $(1,466,000) (Father Co) $(510,000) (Sam Co)

Current Assets $965,000 (Father Co) $528,000 (Sam Co)

Investment in Sam $733,000 (Father Co) $0 (sam Co)

Land $292,000 (Father Co) $60,000 (Sam Co)

Buildings & Equipment (net) $877,000 (Father Co) $265,000 (Sam Co)

Copyright $0 (Father Co) $95,000 (Sam Co)

Total Assets $2,867,000 (Father co) $948,000 (Sam Co)

Accounts Payable $(191,000) (Father Co) $(148,000) (Sam Co)

Notes Payable $(460,000) (Father Co) $(130,000) (Sam Co)

Common Stock $(300,000) (Father Co) $(100,000) (Sam Co)

Additional paid in capital $(450,000) (Father Co) $(60,000) (Sam Co)

Retained Earnings (above) $(1,466,000) (Father Co) $(510,000) (Sam Co)

Total liabilities and equities $(2,867,000) (Father Co) $(948,000) (Sam Co)

required: create a working paper elimination including journet entry format (debit/credit)