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Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid $896,000 in cash to the owners of Taylor to
Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid $896,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $224,000 both before and after Miller's acquisition. On January 1, 2019, Taylor reported a book value of $626,000 (Common Stock = $313,000; Additional Paid-In Capital = $93,900; Retained Earnings = $219,100). Several of Taylor's buildings that had a remaining life of 20 years were undervalued by a total of $83,400. During the next three years, Taylor reports income and declares dividends as follows: Year 2019 2020 2021 Net Income $ 73,100 94,500 105,300 Dividends $10,500 15,800 21,100 e. On the parent company's separate financial records, what would be the December 31, 2021, balance for the Investment in Taylor Company account under each of the following accounting methods? The equity method. The partial equity method. The initial value method. f. As of December 31, 2020, Miller's Buildings account on its separate records has a balance of $844,000 and Taylor has a similar account with a $316,500 balance. What is the consolidated balance for the Buildings account? g. What is the balance of consolidated goodwill as of December 31, 2021? h. Assume that the parent company has been applying the equity method to this investment. On December 31, 2021, the separate financial statements for the two companies present the following information: Common stock Additional paid-in capital Retained earnings, 12/31/21 Miller Company $ 527,500 295,400 654,100 Taylor Company $ 313,000 93,900 444,600 What will be the consolidated balance of each of these accounts
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