Problem 3-40 (Algo) (LO 3-8)

Angela Corporation (a private company) acquired all of the outstanding voting stock of Eddy Tech, Inc., on January 1, 2021, in exchange for $9,330,000 in cash. At the acquisition date, Eddy Techs stockholders equity was $7,930,000 including retained earnings of $3,220,000.

At the acquisition date, Angela prepared the following fair value allocation schedule for its newly acquired subsidiary:

Consideration transferred				$	9,330,000
Eddys stockholders equity					7,930,000
Excess fair over book value				$	1,400,000
to patented technology (5-year remaining life)	$	150,000
to trade names (indefinite remaining life)		517,500
to equipment (8-year remaining life)		78,000			745,500
Goodwill				$	654,500

At the end of 2021, Angela and Eddy Tech report the following amounts from their individually maintained account balances, before consideration of their parentsubsidiary relationship. Parentheses indicate a credit balance.

	Angela				Eddy Tech
Sales	$	(8,070,000	)		$	(2,550,000	)
Cost of goods sold		4,062,000				1,375,000
Depreciation expense		572,000				59,200
Amortization expense		279,000				30,000
Other operating expenses		77,000				55,500
Net income	$	(3,080,000	)		$	(1,030,300	)

Required:

Prepare a 2021 consolidated income statement for Angela and its subsidiary Eddy Tech. Assume that Angela, as a private company, elects to amortize goodwill over a 10-year period.