On December 31, Alpha, Inc , acquired 100 percent of the voting stock of Beta Company Alpha will maintain Beta as a wholly owned subsidiary with its own legal and accounting identity The consideration transferred to the owner of Beta included 50,000 newly issued Alpha common shares ($20 market value, $5 par value) and an agreement to pay an additional $130,000 cash if Beta meets certain project completion goals by December 31 of the following year Alpha estimates a 50 percent probability that Beta will be successful in meeting these goals and uses a 4 percent discount rate to represent the time value of money Immediately prior to the acquisition, the following data for both firms were available Alpha's acquisition of Beta In addition, Alpha assessed a research and development project under way at Beta to have a fair value of $100,000 Although not yet recorded on its books, Alpha paid legal fees of $15,000 in connection with the acquisition and $9,000 in stock issue costs Upon making this acquisition, what amount does Alpha recognize as its Equity Investment on its parent only (pre consolidation) balance sheet Answer How much goodwill would appear on the consolidated balance sheet as of the acquisition date Answer What is the consolidated total stockholders equity Answer What are Alphas parent only (pre consolidation) total assets after making the acquisition Answer Beta Fair Values Revenues Expenses Net income Retained earnings, 1 1 Net income Dividends declared Retained earnings, 12 31 Cash Receivables and inventory PPE Trademarks Total assets Liabilities Common stock Additional paid in capital Retained earnings Total liabilities and equity Alpha Beta Book Values $1,200,000 $875,000 $325,000 $950,000 $325,000 $90,000 $1,185,000 $110,000 $85,000 $750,000 $190,000 $1,400,000 $450,000 $300,000 $160,000 $2,560,000 $885,000 $500,000 $180,000 $400,000 $200,000 $475,000 $70,000 $1,185,000 $435,000 $2,560,000 $885,000 $85,000 $180,000 $600,000 $200,000 $180,000 Beta Fair Values Revenues Expenses Net income Retained earnings, 1 1 Net income Dividends declared Retained earnings, 12 31 Cash Receivables and inventory PPE Trademarks Total assets Liabilities Common stock Additional paid in capital Retained earnings Total liabilities and equity Alpha Beta Book Values $1,200,000 $875,000 $325,000 $950,000 $325,000 $90,000 $1,185,000 $110,000 $85,000 $750,000 $190,000 $1,400,000 $450,000 $300,000 $160,000 $2,560,000 $885,000 $500,000 $180,000 $400,000 $200,000 $475,000 $70,000 $1,185,000 $435,000 $2,560,000 $885,000 $85,000 $180,000 $600,000 $200,000 $180,000

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On December 31, Alpha, Inc., acquired 100 percent of the voting stock of Beta Company. Alpha will maintain Beta as a wholly owned subsidiary with

On December 31, Alpha, Inc., acquired 100 percent of the voting stock of Beta Company. Alpha will maintain Beta as a wholly owned subsidiary with its own legal and accounting identity. The consideration transferred to the owner of Beta included 50,000 newly issued Alpha common shares ($20 market value, $5 par value) and an agreement to pay an additional $130,000 cash if Beta meets certain project completion goals by December 31 of the following year. Alpha estimates a 50 percent probability that Beta will be successful in meeting these goals and uses a 4 percent discount rate to represent the time value of money. Immediately prior to the acquisition, the following data for both firms were available: image text in transcribed Alpha's acquisition of Beta

In addition, Alpha assessed a research and development project under way at Beta to have a fair value of $100,000. Although not yet recorded on its books, Alpha paid legal fees of $15,000 in connection with the acquisition and $9,000 in stock issue costs.

Upon making this acquisition, what amount does Alpha recognize as its Equity Investment on its parent-only (pre-consolidation) balance sheet? Answer
How much goodwill would appear on the consolidated balance sheet as of the acquisition date? Answer
What is the consolidated total stockholders equity? Answer
What are Alphas parent-only (pre-consolidation) total assets after making the acquisition? Answer

Beta Fair Values Revenues Expenses Net income Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 Cash Receivables and inventory PPE Trademarks Total assets Liabilities Common stock Additional paid-in capital Retained earnings Total liabilities and equity Alpha Beta Book Values $1,200,000 $875,000 $325,000 $950,000 $325,000 $90,000 $1,185,000 $110,000 $85,000 $750,000 $190,000 $1,400,000 $450,000 $300,000 $160,000 $2,560,000 $885,000 $500,000 $180,000 $400,000 $200,000 $475,000 $70,000 $1,185,000 $435,000 $2,560,000 $885,000 $85,000 $180,000 $600,000 $200,000 $180,000 Beta Fair Values Revenues Expenses Net income Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 Cash Receivables and inventory PPE Trademarks Total assets Liabilities Common stock Additional paid-in capital Retained earnings Total liabilities and equity Alpha Beta Book Values $1,200,000 $875,000 $325,000 $950,000 $325,000 $90,000 $1,185,000 $110,000 $85,000 $750,000 $190,000 $1,400,000 $450,000 $300,000 $160,000 $2,560,000 $885,000 $500,000 $180,000 $400,000 $200,000 $475,000 $70,000 $1,185,000 $435,000 $2,560,000 $885,000 $85,000 $180,000 $600,000 $200,000 $180,000