Parente Corporation acquired 100 percent of Benson Companys outstanding common stock on January 1, 2015 for $550,000 in cash. Benson reported net assets with a carrying amount of $350,000 at that time. Some of Bensons assets either were unrecorded (having been internally developed) or had fair values that differed from book values as follows:

Book Values Fair Values

Trademarks (indefinite life) $ 60,000 $ 160,000

Customer relationships (5-year remaining life) -0- 75,000

Equipment (10-year remaining life) 342,000 312,000

Any goodwill is considered to have an indefinite life with no impairment charges during the year.

During 2015, Benson had the following income and dividends declared in its own separately prepared financial reports:

Net Income - $222,000

Dividends - $80,000

Following are financial statements at the end of the first year for these two companies prepared from their separately maintained accounting systems. Benson declared and paid dividends in the same period. Credit balances are indicated by parentheses.

Parente Benson

Revenues $ (1,125,000) $ (520,000)

Cost of Goods Sold 300,000 228,000

Depreciation Expense 75,000 70,000

Amortization Expense 25,000 -0-

Income from Benson (210,000) -0-

Net Income $ (935,000) $ (222,000)

Retained Earnings 1/1 $ (700,000) $ (250,000)

Net Income (935,000) (222,000)

Dividends declared 142,000 80,000

Retained Earnings 12/31 $ (1,493,000) $ (392,000)

Cash $ 185,000 $ 105,000

Receivables 225,000 56,000

Inventory 175,000 135,000

Investment in Benson 680,000 -0-

Trademarks 474,000 60,000

Customer Relationships -0- -0-

Equipment (net) 925,000 272,000

Goodwill -0- -0-

Total Assets $ 2,664,000 $ 628,000

Liabilities $ (771,000) $ (136,000)

Common Stock (400,000) (100,000)

Retained Earnings 12/31 (1,493,000) (392,000)

Total Liabilities and Equity $ (2,664,000) $ (628,000)

Requirements:

a )Prepare Parentes acquisition-date fair-value allocation schedule for its investment in Benson.

b) Show how Parente determined its December 31, 2015 Investment in Benson balance.

c) Prepare a worksheet to determine the balances for Parentes December 31, 2015 consolidated financial statements.

Please answer the previous questions in the worksheet provided at the bottom of the page.

			Parente Company and Consolidated Subsidiary
			Consolidation Worksheet
			For Year Ending December 31, 2015
						Consolidation Entries			Consolidated
			Parente	Benson	Type	Debit	Type	Credit	Totals
Revenues			(1,125,000)	(520,000)
Cost of goods sold			300,000	228,000
Depreciation expense			75,000	70,000
Amortization expense			25,000	0
Equity Income from Benson			(210,000)	0
Net Income			(935,000)	(222,000)
Retained earnings 1/1			(700,000)	(250,000)
Net Income			(935,000)	(222,000)
Dividends paid			142,000	80,000
Retained earnings 12/31			(1,493,000)	(392,000)
Cash			185,000	105,000
Receivables			225,000	56,000
Inventory			175,000	135,000
Investment in Benson			680,000	0
Trademarks			474,000	60,000
Customer relationships			0	0
Equipment (net)			925,000	272,000
Goodwill			0	0
Total assets			2,664,000	628,000
Liabilities			(771,000)	(136,000)
Common stock			(400,000)	(100,000)
Retained earnings 12/31			(1,493,000)	(392,000)
Total liabilities and equity			(2,664,000)	(628000)		0		0