On January 1, Paisley, Inc., paid $560,000 for all of Skyler Corporation's outstanding stock This cash payment was based on a price of $180 per share for Skyler's $100 par value preferred stock and $38 per share for its $20 par value common stock The preferred shares are voting, cumulative, and fully participating. At the acquisition date, the book values of Skyler's accounts equaled their fair values. Any excess fair value is assigned to an intangible asset and will be amortized over a 10-year period. During the year, Skyler sold inventory costing $60,000 to Paisley for $90,000. All but $18,000 (measured at transfer price) of this merchandise has been resold to outsiders by the end of the year. At the end of the year, Paisley continues to owe Skyler for the last shipment of inventory priced at $28,000. Also, on January 2, Paisley sold Skyler equipment for $20,000 although it had a carrying amount of only $12,000 (original cost of $30,000). Both companies depreciate such property according to the straight-line method with no salvage value. The remaining life at this date was four years. The following financial statements are for each company for the year ending December 31 (credit balances indicated by parentheses). Determine consolidated financial totals for this business combination. Sales Cost of goods sold Expenses Gain on sale of equipment Net income Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 Cash Accounts receivable Inventory Investment in Skyler Corporation Land, buildings, and equipment Accumulated depreciation Total assets Accounts payable Long-term liabilities Preferred stock Common stock Additional paid-in capital Retained earnings, 12/31 Total liabilities and equity Paisley, Inc. $ (800,000) 528,000 180,000 (8,000) $ (100,000) $ (400,000) (100,000) 60,000 $ (440,000) $ 30,000 300,000 260,000 560,000 680,000 (180,000) $ 1,650,000 S (140,000) (240,000) -0- (620,000) (210,000) (440,000) $(1,650,000) Skyler Corporation S(400,000) 260,000 130,000 -0- S (10,000) $(150,000) (10,000) -0- $(160,000) $ 40,000 100,000 180,000 -0- 500,000 (90,000) $ 730,000 $ 90,000) (180,000) (100,000) (200,000) -0- (160,000) $(730,000) LO 6-5