On January 1, 2021, Brooks Corporation exchanged $1,235,000 fair-value consideration for all of the outstanding voting stock of Chandler, Ine. At the acquisition date, Chandler had a book value equal to $1,185,000. Chandier's individual assets and liabilities had fair values equal to their respective book values except for the patented technology account, which was undervalued by $246.000 with an estimated remaining life of six years. The Chandler acquisition was Brooks's 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, 2021, each company submitted the following financial statements for consolidation. Dividends were declared and paid in the same period. Note: Parentheses indicate a credit balance. BROOKS AND CHANDLER Consolidation Worksheet For Year Ending December 31, 2021 \begin{tabular}{|c|c|c|c|c|c|} \hline \multirow[b]{2}{*}{ Accounts } & \multirow[b]{2}{*}{ Brooks } & \multirow[b]{2}{*}{ Chandler } & \multicolumn{2}{|c|}{ Consolidation Entries } & \multirow[b]{2}{*}{\begin{tabular}{c} Consolidated \\ Totals \end{tabular}} \\ \hline & & & Debit & Credit & \\ \hline \multicolumn{6}{|l|}{ Income Statement } \\ \hline Revenues & $(466,000) & $(671,000) & & & \\ \hline Cost of goods sold & 252,000 & 204,000 & & & \\ \hline Gain on bargain purchase & (196,000) & 0 & & & \\ \hline Depreciation and amortization & 139,000 & 177,000 & & & \\ \hline Equity earnings in Chandler & (249,000) & 0 & & & \\ \hline Net income & $(520,000) & $(290,000) & & & \\ \hline \multicolumn{6}{|l|}{ Statement of Retained Earnings } \\ \hline Retained earnings, 1/1 & $(1,830,000) & $(885,000) & & & \\ \hline Net income & (520,000) & (290,000) & & & \\ \hline Dividends declared & 300,000 & 60,000 & & & \\ \hline Retained earnings, 12/31 & $(2,050,000) & $(1,115,000) & & & \\ \hline \multicolumn{6}{|l|}{ Balance Sheet } \\ \hline Current assets & $142,000 & $422,000 & & & 7 \\ \hline Investment in Chandler & 1,620,000 & 0 & & & \\ \hline Trademarks & 198,000 & 291,000 & & & \\ \hline Patented technology & 307,000 & 455,000 & & & \\ \hline Equipment & 625,000 & 398,000 & & & \\ \hline Total assets & $2,892,000 & $1,566,000 & & & \\ \hline Liabilities & $(307,000) & $(151,000) & & & \\ \hline Common stock & (535,000) & (300,000) & & & \\ \hline Retained earnings, 12/31 & (2,050,000) & (1,115,000) & & & \\ \hline Total liabilities and equity & $(2,892,000) & $(1,566,000) & $ & 5 & \\ \hline \end{tabular} a. Determine the following account balances: - Gain on bargain purchase. - Earnings from Chandler. - Investment in Chandler. b. Prepare a December 31,2021 , consolidated worksheet for Brooks and Chandler. Complete this question by entering your answers in the tabs below. Determine the following account balances. (Input all amounts as positive values.)
