On January 1, 2021, Brooks Corporation exchanged $1,180,500 fair-value consideration for all of the outstanding voting stock of Chandler, Inc. At the acquisition date, Chandler had a book value equal to $972,500. Chandler’s individual assets and liabilities had fair values equal to their respective book values except for the patented technology account, which was undervalued by $330,000 with an estimated remaining life of six years. The Chandler acquisition was Brooks’s only business combination for the year.   In case expected synergies did not materialize, Brooks Corporation wished to prepare for a potential future spin-off of Chandler, Inc. Therefore, Brooks had Chandler maintain its separate incorporation and independent accounting information system as elements of continuing value.   On December 31, 2021, each company submitted the following financial statements for consolidation. Dividends were declared and paid in the same period.     Brooks Corp.   Chandler Inc. Income Statement               Revenues $ (508,000 )   $ (665,000 ) Cost of goods sold   207,000       202,000   Gain on bargain purchase   (122,000 )     0   Depreciation and amortization   152,000       169,000   Equity earnings from Chandler   (239,000 )     0   Net income $ (510,000 )   $ (294,000 ) Statement of Retained Earnings               Retained earnings, 1/1 $ (1,680,000 )   $ (672,500 ) Net income (above)   (510,000 )     (294,000 ) Dividends declared   150,000       70,000   Retained earnings, 12/31 $ (2,040,000 )   $ (896,500 ) Balance Sheet               Current assets $ 127,500     $ 273,500   Investment in Chandler   1,471,500       0   Trademarks   194,000       286,000   Patented technology   342,000       467,000   Equipment   701,000       342,000   Total assets $ 2,836,000     $ 1,368,500   Liabilities $ (261,000 )   $ (172,000 ) Common stock   (535,000 )     (300,000 ) Retained earnings, 12/31   (2,040,000 )     (896,500 ) Total liabilities and equity $ (2,836,000 )   $ (1,368,500 )   Note: Parentheses indicate a credit balance.   a. Determine the following account balances: Gain on bargain purchase. Earnings from Chandler. Investment in Chandler. b. Prepare a December 31, 2021, consolidated worksheet for Brooks and Chandler.

On January 1, 2021, Brooks Corporation exchanged $1,180,500 fair-value consideration for all of the outstanding voting stock of Chandler, Inc. At the acquisition date, Chandler had a book value equal to $972,500. Chandler’s individual assets and liabilities had fair values equal to their respective book values except for the patented technology account, which was undervalued by $330,000 with an estimated remaining life of six years. The Chandler acquisition was Brooks’s only business combination for the year.

In case expected synergies did not materialize, Brooks Corporation wished to prepare for a potential future spin-off of Chandler, Inc. Therefore, Brooks had Chandler maintain its separate incorporation and independent accounting information system as elements of continuing value.

On December 31, 2021, each company submitted the following financial statements for consolidation. Dividends were declared and paid in the same period.

Note: Parentheses indicate a credit balance.

a. Determine the following account balances:

• Gain on bargain purchase.
• Earnings from Chandler.
• Investment in Chandler.

b. Prepare a December 31, 2021, consolidated worksheet for Brooks and Chandler.