Project Scenario

Pecos Company acquired 100 percent of Suaro's outstanding stock for $1,450,000 cash on January 1, 2014, when Suaro had the following balance sheet Prepare a word-processed report that describes and discusses the following worksheet results:

a. The effects of alternative investment accounting methods on the parent's trial balances and the final consolidation figures.

b. The relation between consolidated retained earnings and the parent's retained earnings under each of the three (equity, initial value, partial equity) investment accounting methods.

c. The effect on EPS, return on assets, return on equity, and debt-to-equity ratios of there cognition that all acquisition-related goodwill is considered impaired in 2015