On January 1, 2015, Brooks Corporation exchanged $1,180,500 fair-value consideration for all of the outstanding voting stock of Chandler, Inc. At the acquisition date, Chandler had a book value equal to $972,500. Chandlers individual assets and liabilities had fair values equal to their respective book values except for the patented technology account, which was undervalued by $330,000 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 spin-off of Chandler, Inc. Therefore, Brooks had Chandler maintain its separate incorporation and independent accounting information system as elements of continuing value. On December 31, 2015, each company submitted the following financial statements for consolidation. Dividends were declared and paid in the same period.

Brooks Corp. Chandler Inc.

Income Statement Revenues $ (508,000 ) $ (665,000 )

Cost of goods sold 207,000 202,000

Gain on bargain purchase (122,000 ) 0

Depreciation and amortization 152,000 169,000

Equity earnings from Chandler (239,000 ) 0

Net income $ (510,000 ) $ (294,000 )

Statement of Retained Earnings Retained earnings, 1/1 $ (1,680,000 ) $ (672,500 )

Net income (above) (510,000 ) (294,000 )

Dividends declared 150,000 70,000

Retained earnings, 12/31 $ (2,040,000 ) $ (896,500 )

Balance Sheet Current assets $ 127,500 $ 273,500

Investment in Chandler 1,471,500 0

Trademarks 194,000 286,000

Patented technology 342,000 467,000

Equipment 701,000 342,000

Total assets $ 2,836,000 $ 1,368,500

Liabilities $ (261,000 ) $ (172,000 )

Common stock (535,000 ) (300,000 )

Retained earnings, 12/31 (2,040,000 ) (896,500 )

Total liabilities and equity $ (2,836,000 ) $ (1,368,500 )

Note: Parentheses indicate a credit balance. a. Determine the following account balances.

gain on bargain purchase
equity earnings in Chandler
Investment in Chandler 12/31/15

b. Prepare a December 31, 2015, consolidated worksheet for Brooks and Chandler. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)

Brooks and Chandler
Consolidation Worksheet
For Year Ending Dec. 31,2015

Accounts	Brooks	Chandler	Debit	Credit	consolidatel toltal
Income Stmt

Revenues	(508,000)	(665000)
Cost of goods sold	207000	202000
gains on bargain purchase	(122000)	0
depreciation and amortizaton	152000	169000
equity earnings in Chandler	(239000)	0
Net income	(510000)	(294000)
Statment of Retained Earnings
retained earning, 1/1/	(1,680,000)	(672,500)
Net income	(510,000)	(294,000)
Dividends declared	150,000	70,000
retained earnings, 12/31	(2,040,000)	(896,500)
Balance Sheet
current assets	127500	273500
investment in chandler	1,471,500	0
trademarks	194,000	286,000
patented technology	342,000	467,000
equipment	701,000	342,000
totals assets	2,836,000	1,368,500
Liabilties	(261,000)	(172,000)
Common Stock	(535,000)	(300,000)
Retained earnings, 12/31	(2,040,000)	(896,500)
Total liabilities and equity	(2,836,000)	(1,368,500)