Question
Pixar Company acquired all of Stars outstanding stock on December 31, 2018 for $600,000 cash. Stars accounting records showed the carrying value of net assets
Pixar Company acquired all of Stars outstanding stock on December 31, 2018 for $600,000 cash. Stars accounting records showed the carrying value of net assets on that date to be $400,000, and a patented technology with a 10-year life was undervalued on the records by $60,000. Any recognized goodwill is considered to have an indefinite life. Pixar used the equity method to account for the investment. The following are financial statements as of December 31, 2020 for these two companies prepared from their separately maintained accounting systems. Credit balances are indicated by parentheses. Please provide the consolidated totals for the cells with question marks in the consolidated financial statement as of December 31, 2020.
Balance Sheet Current assets 400,000 280,000 Investment in Star 636,000 - ? Equipment 760,000 120,000 ? Patented technology 170,000 80,000 ? Land 500,000 250,000 Goodwill - ? Total assets 2,466,000 730,000 Liabilities (318,000) (282,000) ? Common stock (600,000) (200,000) Retained earnings, 12/31/2020 (1,548,000) (248,000) Total liabilities and equities (2,466,000) (730,000)
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