P 4-2 Workpapor in Year of Acquisition Liam AB acquired Theo AB's 80 percent ownership on January 1, 2014 for $10,000,000, when Theo AB's stockholders' equity consisted of $2,000,000 capital stock and $8,000,000 retained earnings. Theo AB's assets and liabilities book values were the same with the fair values during that period. The sepa- rate financial statements of Liam AB and Theo AB on December 31, 2014 are as follows (in thousands): Liam AB Theo AB Combined Income and Retained Earnings Statements for the Year Ended December 31 Sales Income from Theo AB Cost of sales Expenses s 67,000 $30,500 $ 1,200 ($42,000) ($25,000) ($21,900) ($ 4,000) Net income Add: Beginning retained January 1 Deduct: Dividends 4,300 1,500 $ 11,600 $ 8,000 S 3,000) ( 500) S12.900 $ 9,000 Retained earnings December 31 Balance Sheet at December 31 Cash Accounts receivable-net Dividends receivable Inventories Other current assets Land Buildings-net Equipment-net Investment in Theo AB $ 800 $ 1,300 S 400 600 800 $ 2,600 $ 400 $ 1,200 S 1,800 3,000 S 4,200 3,200 $ 3,600 $ 2,200 S 2,400 $10,500 $25,500 13,800 Total Assets P 4-2 Workpapor in Year of Acquisition Liam AB acquired Theo AB's 80 percent ownership on January 1, 2014 for $10,000,000, when Theo AB's stockholders' equity consisted of $2,000,000 capital stock and $8,000,000 retained earnings. Theo AB's assets and liabilities book values were the same with the fair values during that period. The sepa- rate financial statements of Liam AB and Theo AB on December 31, 2014 are as follows (in thousands): Liam AB Theo AB Combined Income and Retained Earnings Statements for the Year Ended December 31 Sales Income from Theo AB Cost of sales Expenses s 67,000 $30,500 $ 1,200 ($42,000) ($25,000) ($21,900) ($ 4,000) Net income Add: Beginning retained January 1 Deduct: Dividends 4,300 1,500 $ 11,600 $ 8,000 S 3,000) ( 500) S12.900 $ 9,000 Retained earnings December 31 Balance Sheet at December 31 Cash Accounts receivable-net Dividends receivable Inventories Other current assets Land Buildings-net Equipment-net Investment in Theo AB $ 800 $ 1,300 S 400 600 800 $ 2,600 $ 400 $ 1,200 S 1,800 3,000 S 4,200 3,200 $ 3,600 $ 2,200 S 2,400 $10,500 $25,500 13,800 Total Assets