Consideration transferred.. Eddy's stockholder's equity Excess fair over book value to patented technology (5-year remaining life) to trade names (Indefinite remaining life) . to equipment (8-year remaining life). Goodwill . $9,000,000 7,200,000 $1,800,000 $ 150,000 500,000 50,000 700,000 $1,100,000 Sales ... Cost of goods sold Depreciation expense Amortization expense Other operating expenses Net income. Angela (7,850,000) 4,200,000 Eddy Tech (2,400,000) 1,300,000 48,000 12,000 425,000 250,000 75,000 (2,900,000) 53,750 (986,250)
Consideration transferred.. Eddy's stockholder's equity Excess fair over book value to patented technology (5-year remaining life) to trade names (Indefinite remaining life) . to equipment (8-year remaining life). Goodwill . $9,000,000 7,200,000 $1,800,000 $ 150,000 500,000 50,000 700,000 $1,100,000 Sales ... Cost of goods sold Depreciation expense Amortization expense Other operating expenses Net income. Angela (7,850,000) 4,200,000 Eddy Tech (2,400,000) 1,300,000 48,000 12,000 425,000 250,000 75,000 (2,900,000) 53,750 (986,250)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Angela Corporation (a private company) acquired all of the outstanding voting stock of Eddy Tech, Inc., on January 1, 2018, in exchange for $9,000,000 in cash. At the acquisition date, Eddy Tech’s stockholders’ equity was $7,200,000 including retained earnings of $3,000,000.
At the acquisition date, Angela prepared the following fair value allocation schedule for its newly acquired subsidiary:
At the end of 2018, Angela and Eddy Tech report the following amounts from their individually maintained account balances, before consideration of their parent-subsidiary relationship. Parentheses indicate a credit balance.
Required:
Prepare a 2018 consolidated income statement for Angela and its subsidiary Eddy Tech. Assume that Angela, as a private company, elects to amortize goodwill over a 10-year period.
Transcribed Image Text:Consideration transferred..
Eddy's stockholder's equity
Excess fair over book value
to patented technology (5-year remaining life)
to trade names (Indefinite remaining life) .
to equipment (8-year remaining life).
Goodwill .
$9,000,000
7,200,000
$1,800,000
$ 150,000
500,000
50,000
700,000
$1,100,000
Transcribed Image Text:Sales ...
Cost of goods sold
Depreciation expense
Amortization expense
Other operating expenses
Net income.
Angela
(7,850,000)
4,200,000
Eddy Tech
(2,400,000)
1,300,000
48,000
12,000
425,000
250,000
75,000
(2,900,000)
53,750
(986,250)
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