Parker, Inc., acquires 70 percent of Sawyer Company for $420,000. The remaining 30 percent of Sawyers outstanding shares continue to trade at a collective value of $174,000. On the acquisition date, Sawyer has the following accounts: Book Value Fair Value Current assets $ 210,000 $ 210,000 Land 170,000 180,000 Buildings 300,000 330,000 Liabilities (280,000 ) (280,000 ) The buildings have a 10-year life. In addition, Sawyer holds a patent worth $140,000 that has a five-year life but is not recorded on its financial records.

At the end of the year, the two companies report the following balances: Parker Sawyer Revenues $ (900,000 ) $ (600,000 ) Expenses 600,000 400,000

a. Assume that the acquisition took place on January 1. What figures would appear in a consolidated income statement for this year?

1. combined revenues 2. combined expenses 3.consolidated net income 4. NCI in Sawyers income 5. controlling interest in consolidated income

b. Assume that the acquisition took place on April 1. Sawyers revenues and expenses occurred uniformly throughout the year. What amounts would appear in a consolidated income statement for this year?

1. combined revenues 2. combined expenses 3.consolidated net income 4. NCI in Sawyers income 5. controlling interest in consolidated income