Calculating Missing Values to be disclosed in Final Financial Statements.
Bon Air, Inc., acquired 70 percent (2,800 shares) of the outstanding voting stock of Creedmoor Corporation on January 1, 2004, for $250,000 cash Creedmoor's net assets on that date totaled $230,000, but this balance included three accounts having fair values that differed from their book values:
|
|
Book Value
|
Fair Value
|
|
Land ................................................................................................
|
$30,000
|
$ 40,000
|
|
Equipment (14-year life) ............................................................
|
50,000
|
118,000
|
|
Liabilities (10-year life) ...............................................................
|
(70,000)
|
(50,000)
|
|
|
Bon Air
|
Creedmoor
|
|
Revenues
|
$ (694,800)
|
$(250,000)
|
|
Operating expenses
|
630,000
|
180,000
|
|
Investment income
|
(44,200)
|
-0-
|
|
Net income
|
$ (109,000)
|
$ (70,000)
|
|
Retained earnings, 1/1/07
|
$ (760,000)
|
$(260,000)
|
|
Net income
|
(109,000)
|
(70,000)
|
|
Dividends paid
|
68,000
|
10,000
|
|
Retained earnings, 12/31/07
|
$ (801,000)
|
$(320,000)
|
|
Current assets
|
$ 72,000
|
$ 120,000
|
|
Investment in Creedmoor Corp
|
321,800
|
-0-
|
|
Land
|
241,000
|
50,000
|
|
Buildings (net)
|
289,000
|
200,000
|
|
Equipment (net)
|
165,200
|
40,000
|
|
Total assets
|
$ 1,089,000
|
$ 410,000
|
|
Liabilities
|
$ (180,000)
|
$ (50,000)
|
|
Common stock
|
(50,000)
|
(40,000)
|
|
Additional paid-in capital
|
(58,000)
|
-0-
|
|
Retained earnings, 12/31/07
|
(801,000)
|
(320,000)
|
|
Total liabilities and equities
|
$(1,089,000)
|
$(410,000)
|
Consolidated financial statements are being prepared on December 31, 2007. What balance should be reported for each of the following accounts?
Operating Expenses
No controlling Interest in Creedmoor's Net Income
Revenues
Retained Earnings, 1/1/07
Net Income
Dividends Paid
Land
Equipment
Liabilities
Common Stock
Retained Earnings, 12/31/07
No controlling Interest in Creedmoor, 12/31/07