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On January 1 , 2 0 2 4 , Brooks Corporation exchanged $ 1 , 1 4 8 , 0 0 0 fair - value
On January Brooks Corporation exchanged $ fairvalue consideration for all of the outstanding voting stock of Chandler, Incorporated. At the acquisition date, Chandler had a book value equal to $ Chandlers individual assets and liabilities had fair values equal to their respective book values except for the patented technology account, which was undervalued by $ with an estimated remaining life of six years. The Chandler acquisition was Brookss only business combination for the year. In case expected synergies did not materialize, Brooks Corporation wished to prepare for a potential future spinoff of Chandler, Incorporated. Therefore, Brooks had Chandler maintain its separate incorporation and independent accounting information system as elements of continuing value. On December each company submitted the following financial statements for consolidation. Dividends were declared and paid in the same period. Accounts Brooks Corporation Chandler Incorporated Income Statement Revenues $ $ Cost of goods sold Gain on bargain purchase Depreciation and amortization Equity earnings from Chandler Net income $ $ Statement of Retained Earnings Retained earnings, $ $ Net income above Dividends declared Retained earnings, $ $ Balance Sheet Current assets $ $ Investment in Chandler Trademarks Patented technology Equipment Total assets $ $ Liabilities $ $ Common stock Retained earnings, Total liabilities and equity $ $ Note: Parentheses indicate a credit balance. Required: Determine the following account balances: Gain on bargain purchase. Earnings from Chandler. Investment in Chandler. Prepare a December consolidated worksheet for Brooks and Chandler.
On January Brooks Corporation exchanged $ fairvalue consideration for all of the outstanding voting stock of Chandler, Incorporated. At the acquisition date, Chandler had a book value equal to $ Chandlers individual assets and liabilities had fair values equal to their respective book values except for the patented technology account, which was undervalued by $ with an estimated remaining life of six years. The Chandler acquisition was Brookss only business combination for the year.
In case expected synergies did not materialize, Brooks Corporation wished to prepare for a potential future spinoff of Chandler, Incorporated. Therefore, Brooks had Chandler maintain its separate incorporation and independent accounting information system as elements of continuing value.
On December each company submitted the following financial statements for consolidation. Dividends were declared and paid in the same period.
Accounts Brooks Corporation Chandler Incorporated
Income Statement
Revenues $ $
Cost of goods sold
Gain on bargain purchase
Depreciation and amortization
Equity earnings from Chandler
Net income $ $
Statement of Retained Earnings
Retained earnings, $ $
Net income above
Dividends declared
Retained earnings, $ $
Balance Sheet
Current assets $ $
Investment in Chandler
Trademarks
Patented technology
Equipment
Total assets $ $
Liabilities $ $
Common stock
Retained earnings,
Total liabilities and equity $ $
Note: Parentheses indicate a credit balance.
Required:
Determine the following account balances:
Gain on bargain purchase.
Earnings from Chandler.
Investment in Chandler.
Prepare a December consolidated worksheet for Brooks and Chandler.
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