Brooks Corp. Chandler Inc. Income Statement $ (640,000) 255,000 (126,000) 150,000 Revenues.. $ (587,000) Cost of goods sold Gain on bargain purchase. Depreciation and amortization. Equity earnings from Chandler. Net income.... 203,000 -0- 151,000 (199,000) $ (560,000) -0- $ (233,000) Statement of Retained Earnings Retained earnings, 1/1.... Net income (above) . Dividends declared.. Retained earnings, 12/31 $(1,835,000) (560,000) 100,000 $(2,295,000) $ (805,000) (233,000) 40,000 $ (998,000) Balance Sheet Current assets.. $ 343,000 1,468,000 134,000 $ 432,000 -0- Investment in Chandler Trademarks..... Patented technology Equipment 221,000 395,000 410,000 693,000 $ 3,033,000 341,000 $ 1,404,000 Total assets $ (203,000) (535,000) (2,295,000) $(3,033,000) $ (106,000) (300,000) (998,000) $(1,404,000) Liabilities.. Common stock Retained earnings, 12/31 Total liabilities and equity

On January 1, 2018 Casey Corporation exchanged $3,210,000 cash for 100 percent of the outstanding voting stock of Kennedy Corporation. Casey plans to maintain Kennedy as a wholly owned subsidiary with separate legal status and accounting information systems. At the acquisition date, Casey prepared the following fair-value allocation schedule: Fair value of Kennedy (consideration transferred) Carrying amount acquired Excess fair value to buildings (undervalued) to licensing agreements (overvalued) to goodwill (indefinite life) Accounts Cash Accounts receivable Inventory Investment in Kennedy Buildings (net) Licensing agreements Goodwill Total assets Accounts payable Long-term debt Common stock Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from their separate financial records. Additional paid-in capital Retained earnings Total liabilities and equities $ Casey 480,000 1,420,000 1,490,000 3,210,000 5,992,500 0 $ 393,000…

On January 1, 2017, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,120,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $830,000, retained earnings of $380,000, and a noncontrolling interest fair value of $480,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing. During the next two years, Smashing reported the following: Net Income 2017 S 2018 Inventory Purchases Dividends Declared from 280,000 260,000 Corgan $ 48,000 58,000 $ 230,000 250,000 Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2017 and 2018, 30 percent of the current year purchases remain in Smashing's inventory. 1. Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2018. 2. Prepare the…

On January 1, 2020, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,050,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $810,000, retained earnings of $360,000, and a noncontrolling interest fair value of $450,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing.   During the next two years, Smashing reported the following:     Net Income Dividends Declared Inventory Purchases from Corgan 2020 $ 260,000   $ 46,000   $ 210,000   2021   240,000     56,000     230,000       Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2020 and 2021, 40 percent of the current year purchases remain in Smashing's inventory.   Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of…

On March 31, 2018, Elf Hotels purchased Reindeers and Riders Company for $6,000,000. Reindeers reported the following balance sheet on the date of the acquisition:

On July 1, 2021, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $792,400 in cash and equity securities. The remaining 30 percent of Atlanta’s shares traded closely near an average price that totaled $339,600 both before and after Truman’s acquisition.   In reviewing its acquisition, Truman assigned a $125,500 fair value to a patent recently developed by Atlanta, even though it was not recorded within the financial records of the subsidiary. This patent is anticipated to have a remaining life of five years.   The following financial information is available for these two companies for 2021. In addition, the subsidiary’s income was earned uniformly throughout the year. The subsidiary declared dividends quarterly.     Truman   Atlanta Revenues $ (768,485 )   $ (536,000 ) Operating expenses   418,000       378,000   Income of subsidiary   (46,515 )     0   Net income $ (397,000 )   $ (158,000 ) Retained earnings, 1/1/21 $…