Question
Tyler Company acquired all of Jasmine Companys outstanding stock on January 1, 2016, for $258,100 in cash. Jasmine had a book value of only $189,500
Tyler Company acquired all of Jasmine Companys outstanding stock on January 1, 2016, for $258,100 in cash. Jasmine had a book value of only $189,500 on that date. However, equipment (having an eight-year remaining life) was undervalued by $68,000 on Jasmines financial records. A building with a 20-year remaining life was overvalued by $15,000. Subsequent to the acquisition, Jasmine reported the following:
| Net Income | Dividends Declared | |||||
| 2016 | $ | 65,400 | $ | 10,000 | ||
| 2017 | 80,500 | 40,000 | ||||
| 2018 | 33,000 | 20,000 | ||||
In accounting for this investment, Tyler has used the equity method. Selected accounts taken from the financial records of these two companies as of December 31, 2018, follow:
| Tyler Company | Jasmine Company | ||||||
| Revenuesoperating | $ | (360,000 | ) | $ | (178,000 | ) | |
| Expenses | 291,000 | 145,000 | |||||
| Equipment (net) | 512,000 | 80,500 | |||||
| Buildings (net) | 304,000 | 69,300 | |||||
| Common stock | (290,000 | ) | (57,900 | ) | |||
| Retained earnings, 12/31/18 | (436,000 | ) | (202,000 | ) | |||
Determine the following account balances as of December 31, 2018:
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