Parrett Corp. acquired 100% of Jones Inc. on January 1, 2011, at a price in excess of the subsidiary's fair value. On that date, Parrett's equipment (ten-year life) had a book value of $360 but a fair value of $480. Jones had equipment (ten-year life) with a book value of $240 and a fair value of $350. Parrett used the equity method to record its investment in Jones. On December 31, 2014, Parrett had equipment with a book value of $250 and a fair value of $400. Jones had equipment with a book value of $170 and a fair value of $320. What is the consolidated balance for the Equipment account as of December 31, 2014?

On January 1, 2014, Franel Co. acquired all of the common stock of Hurlem Corp.for $485. Included in the price was patented technology which was unrecorded on Hurlems books with a ten year life valued at $70. Selected accounts as of December 31, 2014 for Hurlem were as follows:

Current assets	285
Fixed assets, net	615
Current liabilities	(165)
Long term debt	(85)
Common stock	(150)
Beginning retained earnings	(250)
Revenue	(620)
Expenses	330
Dividends	40

What is the balance in the Investment in Hurlem account on January 1, 2015?

Kaye Company acquired 100% of Fiore Company on January 1, 2014. Kaye paid $1,000 excess consideration over book value which is being amortized at $20 per year. Fiore reported net income of $400 in 2014 and paid dividends of $100. Assume the equity method is used. How much will Kaye's income increase or decrease as a result of Fiore's operations?

Femur Co. acquired 100% of the voting common stock of Harbor Corp. on January 1, 2014 for $3,000. During 2014, Harbor had revenues of $2,500, expenses of $2,000 and paid dividends of $250. The amortization of excess cost allocations totaled $60 in 2014. What is the balance in Femurs investment account on January 1, 2015?

On January 1, 2012, Arm purchased 100% of the outstanding stock of Leg for $860. On December 31, 2011 common stock of Leg was $150 and retained earnings were $250. Included in the purchase was equipment undervalued by $100 with a five year life and a trademark with a seven year life valued at $70 with the remainder going to goodwill. Legs net income was $100 in 2012 and $140 in 2013. Dividends were paid on December 15 and were $20 for all years. Summarized accounts for 12/31/2014 are as follows:

	Arm	Leg
Current assets	398	910
Investment in Leg	720
Buildings	120	110
Equipment	380	450
Accumulated depreciation	(55)	(160)
Goodwill
Trademark	20	20
Accumulated amortization	-	-
Total assets	1,583	1,330
Liabilities	(621)	(500)
Common stock	(50)	(150)
Retained earnings beginning	(562)	(450)
Net income	(350)	(250)
Dividends		20
Total Liabilities & Equity	(1,583)	(1,330)

Prepare any journal entries required to close the year and any consolidation entries required for preparing consolidated financial statements.

J

J

J

S

Worksheet for Calculating the Allocation of Goodwill

Cost allocation at purchase

A

D

I

E

E

Worksheet for Reconciliation of Investment in Leg

	Balance December 31, 2014
J
J
J
S
A
I
D
E
Total