Allen Company acquired 100 percent of Bradford Company’s voting stock on January 1, 2014, by issuing...

3.9 Ratings (779 Votes)

a -1	Accounts	Amount	Life	Annual Excess Amortization
	Land	13200	yrs
	Equipment	9600	5 Yrs	$1,920
	Formula	20400	20 yrs	$1,020
	Total	43200		$2,940

a-2	Equity Accrual	$161,900		Equipment
	Amortization Expense	($2,940)		(9600-1920*4 yrs)	$1,920
	Equity Earnings	$158,960		Formula
				(20400-1020*4 yrs)	$16,320
	Note:
	Acquisition date
	fair value
	(10000*$15.00)	$150,000
	Less Book Value	$106,800
	Fair Value in excess of Book Value	$43,200
B	Complete Worksheet
		Allen	Bradford		Eliminations		Eliminations	Consolidated
	Revenues	($542,000)	($220,000)					($762,000)
	Cost of Goods Sold	$179,000	$82,000					$261,000
	Amortization Expenses			(E)	$1,020			$1,020
	Depreciation Expenses	$135,000	$60,300	(E)	$1,920			$197,220
	Subsidiary earnings	($74,760)		(I)	$74,760			$0
	Net Income	($302,760)	($77,700)					($380,460)

	Retained Earnings 1/1	($792,000)	($124,200)	(S)	$124,200			($792,000)
	Net Income	($302,760)	($77,700)					($380,460)
	Dividends Declared	$175,500	$40,000			(D)	$40,000	$175,500
	Retained earnings 12/31	($919,260)	($161,900)					($919,260)

	Cash	$300,000	$88,000					$388,000
	Investment in Bradford	$255,400		(D)	$40,000	(S)	$189,200
						(A)	$31,440
						(I)	$74,760
	Formula			(A)	$16,320	(E)	$1,020	$15,300
	land	$490,000	$72,000	(A)	$13,200			$575,200
	Buildings and equipment	$744,000	$164,000	(A)	$1,920	(E)	$1,920	$908,000
	Total Assets	$1,789,400	$324,000					$1,886,500

	Current Liabilities	($180,140)	($97,100)					($277,240)
	Common Stock	($600,000)	($60,000)	(S)	$60,000			($600,000)
	APIC	($90,000)	($5,000)	(S)	$5,000			($90,000)
	Retained Earnings 12/31	($919,260)	($161,900)					($919,260)
	Total Liability and SE	($1,789,400)	($324,000)					($1,886,500)

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