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On January 1, 2017, Maddox Company acquired Smoltz Corporation by issuing 46,000 shares of its SI par common stock with a market value of exist11
On January 1, 2017, Maddox Company acquired Smoltz Corporation by issuing 46,000 shares of its SI par common stock with a market value of exist11 per share. A building on Smoltz's books was undervalued by exist30,000, resulting in annual amortization of exist1, 500. Also, there was an unrecorded patent valued at exist70,000, resulting in annual amortization of exist7,000. The separate 2017 financial statements for Maddox and Smoltz are presented below: a. Prepare the journal entry to record the investment in the subsidiary. b. Show the computation of Equity Income for 2017. c. Show the computation of Equity Investment at December 31, 2017. d. Prepare a consolidation worksheet for 2017
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