Bassett Inc. acquired all of the outstanding common stock of Brinkman Corp. on January
for $ At the time, Brinkman reported $ of capital stock and $ of
retained earnings. On the acquisition date, equipment with a tenyear life was undervalued on
Brinkmans financial records by $ Brinkman also owned an unrecorded customer list
with an assessed fair value of $ and an estimated remaining life of five years.
Brinkman earned reported net income of $ in and $ in Brinkman
paid dividends of $ in years and Selected account balances as of December
for the two companies follow.
Bassett Brinkman
Revenues $$
Expenses
Investment income Not given
Retained Earnings
Dividends Declared
How much Investment income should Basset recognize in year
At what amount should Bassets investment in Brinkman be valued on
Assume that trial balances are to be consolidated on Prepare the consolidation
worksheet entries below.
