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The following are preliminary financial statements for Black Co. and Blue Co. for the year ending December 31, 2013 prior to Blacks acquisition of Blue.

The following are preliminary financial statements for Black Co. and Blue Co. for the year ending December 31, 2013 prior to Blacks acquisition of Blue.

Black Co.

Blue Co.

Sales

$360,000

$228,000

Expenses

(240,000)

(132,000)

Net income

$120,000

$ 96,000

Retained earnings, January 1, 2013

$480,000

$252,000

Net income (from above)

120,000

96,000

Dividends paid

(36,000)

-0-

Retained earnings, December 31, 2013

$564,000

$348,000

Current assets

$360,000

$120,000

Land

120,000

108,000

Building (net)

480,000

336,000

Total assets

$960,000

$564,000

Liabilities

$108,000

$132,000

Common stock

192,000

72,000

Additional paid-in capital

96,000

12,000

Retained earnings, December 31,2013

564,000

348,000

Total liabilities and stockholders equity

$960,000

564,000

On December 31, 2013 (subsequent to the preceding statements), Black exchanged 10,000 shares of its $10 par value common stock for all of the outstanding shares of Blue. Black's stock on that date has a fair value of $60 per share. Black was willing to issue 10,000 shares of stock because Blue's land was appraised at $204,000. Black also paid $14,000 to several attorneys and accountants who assisted in creating this combination.

Required:

Assuming that these two companies retained their separate legal identities, prepare a consolidation worksheet as of December 31, 2013 after the acquisition transaction is completed.

Consolidated Entries

Account

Black Company

Blue Company

DR

CR

Consolidated Balance

Income Statement

Sales

Expenses

Net Income

Statement of Retained Earnings

R/E 1/1/15

Net Income

Dividends

RE 12/31/2015

Balance Sheet

Current Assets

Investment in Blue Co.

Land

Building (net)

Goodwill

Total Assets

Liabilities

Common Stock

Additional Paid-in Capital

R/E 12/31/2015

Total Liabilities & Stockholders Equity

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