Question

Tyler Company acquired all of Jasmine Company’s outstanding stock on January 1, 2016, for $289,800 in...

Tyler Company acquired all of Jasmine Company’s outstanding stock on January 1, 2016, for $289,800 in cash. Jasmine had a book value of only $207,400 on that date. However, equipment (having an eight-year remaining life) was undervalued by $74,400 on Jasmine’s financial records. A building with a 20-year remaining life was overvalued by $13,900. Subsequent to the acquisition, Jasmine reported the following:

Net Income Dividends Declared
2016 $ 62,400 $ 10,000
2017 76,500 40,000
2018 30,200 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
Revenues—operating $ (496,000 ) $ (109,000 )
Expenses 252,000 78,800
Equipment (net) 416,000 65,000
Buildings (net) 404,000 84,300
Common stock (290,000 ) (76,800 )
Retained earnings, 12/31/18 (530,000 ) (220,000 )

Determine the following account balances as of December 31, 2018

a investment in Jasmine Company
b Equity in Subsidiary Earnings
c Consolidated Net income
d Consolidated Equipment (NET)
e Consolidated Building (NET)
f Consolidated Goodwill (NET)
g consolidated common stock
h consolidated retained earnings 12/31/18
Business   Accounting   
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