Questions:

1. Compute the goodwill allocation to the controlling and non-controlling interest.

2. Assume that the acquisition took place on January 1. What figures would appear in consolidated income statement for this year?

3. Assume that the acquisition took place on April 1. Sawyer's revenues and expenses occurred uniformly throughout the year. What amount would appear in consolidated income statement for this year?

Parker, Inc., acquires 70 percent of Sawyer Company for $420,000. The remaining 30 percent of Sawyer's outstanding shares continue to trade at a collective value of $174,000. On the acquisition date, Sawyer has the following accounts: Book Value Fair Value Current assets $ 210,000 $ 210,000 Land .... 170,000 180,000 Buildings 300,000 330,000 Liabilities (280,000) (280,000) The buildings have a 10-year life. In addition, Sawyer holds a patent worth $140,000 that has a five-year life but is not recorded on its financial records. At the end of the year, the two companies report the following balances: Parker Sawyer Revenues $(900,000) $(600,000) Expenses 600,000 400,000