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On January 1, 2016, Caleb Corp. paid $1,020,000 to acquire all Kelton Co using cash for the combination.

Kelton maintained separate incorporation.

Caleb used the equity method to account for the investment. The following information is available for Keltons assets, liabilities, and stockholders' equity accounts on January 1, 2016:

Book Value Fair Value

current assets 120,000 120,000

land 72,000 192,000

Building(twenty year life) 240,000 268,000

Equipment(ten year life) 540,000 516,000

current liabilities 24,000 24,000

long-term liabilities 120,000 120,000

common stock 228,000

additional paid-in capital 384,000

retained earnings 216,000

Kelton earned net income for 2016 of $126,000 and paid dividends of $48,000 during the year. Instruction:

1.Prepare the journal entries for the purchased of investment.

2. Prepare the analysis for the business combination and the journal entries for this moment in January 1, 2016.

3. What is the amount of goodwill at January 1, 2016? _______________

4. What is the balance of Cash in the Consolidate Balance Sheet at Jan 1, 2016?

5. What is the amount of the amortization allocation for December 31, 2016? _______________________

6. What is the amount of controlling interest and noncontrolling interest for January 1, 2016? __________________________________________

7. What is the Balance of Investment in Kelton account at the end of the 2016?

8. What is the Balance of the Common Stock and Retained Earnings in the Balance Sheet Consolidated at December 31, 2016?

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