On January 1, 2008, ABC Company obtained 80% of XYZ Company's common stock and 40% of its non-voting, cumulative preferred stock. Consideration transferred by ABC was $1,200,000 for the common and $124,000 for the preferred. Any excess acquisition-date fair value over book value is considered patents and amortized over 10 years.
The capital structure of XYZ immediately previous to the acquisition is:
Common stock, $10 par value $500,000
Preferred Stock, 6% cumulative, $10 par value $300,000
Additional paid-in capital $200,000
Retained earnings $500,000
Total Stockholders' Equity $1,500,000.00
Create an allocations schedule and S&A consolidation journal entry for the December 31, 2008 consolidation worksheet.