Mergaronite Hill Revenues $(600,000) $(250,000) ...
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Accounting
Mergaronite
Hill
Revenues
$(600,000)
$(250,000)
Cost of goods sold
280,000
100,000
Depreciation expense
120,000
50,000
Investment income
Not given
NA
Retained earnings, 1/1/18
(900,000)
(600,000)
Dividends declared
130,000
40,000
Current assets
200,000
690,000
Land
300,000
90,000
Buildings (net)
500,000
140,000
Equipment (net)
200,000
250,000
Liabilities
(400,000)
(310,000)
Common stock
(300,000)
(40,000)
Additional paid-in capital
(50,000)
(160,000)
page 144
Assume that Mergaronite took over Hill on January 1, 2014, by issuing 7,000 shares of common stock having a par value of $10 per share but a fair value of $100 each. On January 1, 2014, Hills land was undervalued by $20,000, its buildings were overvalued by $30,000, and equipment was undervalued by $60,000. The buildings had a 10-year remaining life; the equipment had a 5-year remaining life. A customer list with an appraised value of $100,000 was developed internally by Hill and was to be written off over a 20-year period.
the consolidated totals be determined without knowing which method the parent used to account for the subsidiary?
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