Tyler Company acquired all of Jasmine Companys outstanding stock on January 1, 2016, for $244,700...
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Tyler Company acquired all of Jasmine Companys outstanding stock on January 1, 2016, for $244,700 in cash. Jasmine had a book value of only $169,500 on that date. However, equipment (having an eight-year remaining life) was undervalued by $61,600 on Jasmines financial records. A building with a 20-year remaining life was overvalued by $12,000. Subsequent to the acquisition, Jasmine reported the following:
Net Income
Dividends Declared
2016
$
54,600
$
10,000
2017
88,800
40,000
2018
38,000
20,000
In accounting for this investment, Tyler has used the equity method. Selected accounts taken from the financial records of these two companies as of December 31, 2018, follow:
Tyler Company
Jasmine Company
Revenuesoperating
$
(480,000
)
$
(189,000
)
Expenses
275,000
151,000
Equipment (net)
336,000
61,500
Buildings (net)
302,000
70,200
Common stock
(290,000
)
(78,300
)
Retained earnings, 12/31/18
(510,000
)
(169,000
)
Determine the following account balances as of December 31, 2018:
1)Investment in Jasmine Company
2) Equity in Subsidiary Earnings
3) Consolidated Net Income
4) Consolidated Equipment (net)
5) Consolidated Building (net)
6) Consolidated Goodwill (net)
7) Consolidated Common Stock
8) Consolidated Retained Earnings, 12/31/18
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