Question

On January 1, 2015, Panther Incorporated purchased 80% of the Staffer Company’s outstanding voting stock for $840,000 in cash and other considerations. On that date, Panther assessed the net fair value of Staffer’s identifiable liabilities and assets at $1,050,000. The 20% noncontrolling interest was assessed at a fair value of $210,000. Amortization of excess fair value over book value was not part of the acquisition. On December 31, 2016, each company’s financial records included the account balances shown below in Table 1.

Table 1: Account Balances for Year Ending December 31, 2016

Account

Panther

Staffer

Sales

$      1,280,000

$         720,000

Cost of goods sold

$         580,000

$         394,000

Operating expenses

$         300,000

$         210,000

Retained earnings, January 1, 2016

$      1,480,000

$         360,000

Inventory

$         692,000

$         220,000

Buildings (net)

$         716,000

$         314,000

Investment income

3. On January 1, 2015, Panther sells a building to Staffer for $160,000, even though the building’s book value on January 1 was only $100,000. The building’s remaining life was five years, with depreciation calculated under the straight-line method (no salvage value). Determine the account balances, for the accounts shown below, that will appear on 2016 consolidated financial statements:    • Buildings (net).    • Operating expenses.    • Noncontrolling interest in Staffer’s net income. You may use Table 4 below as a worksheet.
Table 4: Worksheet
Consolidated Buildings (Net)	Balance	Balance
Consolidated Expenses	Balance	Balance
Noncontrolling Interest in Staffer's Net Income	Balance	Balance

Not provided

$                     -

Answer 1