Question
On January 1, 2018, Adora Inc. acquired 80% of the outstanding voting common stock of Alvah Inc. for $364,000. There is no active market for
On January 1, 2018, Adora Inc. acquired 80% of the outstanding voting common stock of Alvah Inc. for $364,000. There is no active market for Strongs stock. Of this payment, $28,000 was allocated to equipment (with a five-year life) that had been undervalued on Alvah's books by $35,000. Any remaining excess was attributable to goodwill, which has not been impaired.
As of December 31, 2018, before preparing the consolidated worksheet, the financial statements appeared as follows:
| Adora Inc. |
| Alvah Inc. | ||||
Revenues | $ | 420,000 |
|
| $ | 280,000 |
|
Cost of goods sold |
| (196,000 | ) |
|
| (112,000 | ) |
Operating expenses |
| (28,000 | ) |
|
| (14,000 | ) |
Net income | $ | 196,000 | ) |
| $ | 154,000 |
|
Retained earnings, 1/1/18 | $ | 420,000 |
|
| $ | 210,000 |
|
Net income (above) |
| 196,000 |
|
|
| 154,000 |
|
Dividends paid |
| 0 |
|
|
| 0 |
|
Retained earnings, 12/31/18 | $ | 616,000 |
|
| $ | 364,000 |
|
Cash and receivables | $ | 294,000 |
|
| $ | 126,000 |
|
Inventory |
| 210,000 |
|
|
| 154,000 |
|
Investment in Strong Corp |
| 364,000 |
|
|
| 0 |
|
Equipment (net) |
| 616,000 |
|
|
| 420,000 |
|
Total assets | $ | 1,484,000 |
|
| $ | 700,000 |
|
Liabilities | $ | 588,000 |
|
| $ | 196,000 |
|
Common stock |
| 280,000 |
|
|
| 140,000 |
|
Retained earnings, 12/31/18 (above) |
| 616,000 |
|
|
| 364,000 |
|
Total liabilities and stockholders equity | $ | 1,484,000 |
|
| $ | 700,000 |
|
During 2018, Adora bought inventory for $112,000 and sold it to Alvah for $140,000. Only half of the inventory purchase price had been remitted to Adora by Alvah at year-end. As of December 31, 2018, 60% of these goods remained in the company's possession.
- What is the total of consolidated revenues?
- What is the total of consolidated operating expenses?
- What is the total of consolidated cost of goods sold?
- What is the consolidated total of noncontrolling interest appearing in the balance sheet?
- What is the consolidated total for equipment (net) at December 31, 2018?
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