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Question 11 (10 points) Barrel Co. acquired all of the common stock of Crate Co. on January 1, 2019. As of that date, Crate had
Question 11 (10 points) Barrel Co. acquired all of the common stock of Crate Co. on January 1, 2019. As of that date, Crate had the following account balances: Current assets 185,000 Equipment-net (9-year life) 96,000 Buildings - net (16-year life] 44,000 Land 35,000 Current liabilities (25,0000) Long-term liabilities (105,000) Common stock (25,000) Additional paid-in capital (85,000) Retained earnings (120,000) During 2019, Crate reported net income of $136,000 while paying dividends of $26,000. During 2020, Crate reported net income of $178,000 while paying dividends of $39,000. Assume that Barrel acquired Crate for $683,800 in cash. As of January 1, 2019, Crate's land had a fair value of $171,000, its buildings were valued at $332,000, and its equipment was appraised at $104,100. Any excess of consideration transferred over fair value of assets and liabilities acquired is due to an unamortized patent to be amortized over 7 years. Barrel decided to use equity method for this Investment. Prepare the following: a. Consolidation Entry S for December 31, 2020 b. Consolidation Entry A for December 31, 2020
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