Reference no: EM131638706

Problem - On April 1 C purchased D for $1,800.  At the time of the acquisition, C determined that D had undervalued assets as follows:

Asset                                       Value                 Remaining Life

Land                                        200                    Forever

Building                                    400                     10

Patent                                      300                     15

Research and development        250                     5

Their trial balances at the end of year 1 were as follows:

                                                C             D

Cash                                      750         850

Accounts receivable                 350         50

Land                                                     200

Building                                                400

Accumulated depreciation                     (150)

Investment in D                      1,600    

Accounts payable                   (450)      (160)

Common stock                        (350)      (100)

Retained earnings                  (1,150)    (450)

Revenue                              (1,840)   (1,580)

Depreciation expense                           25

Other expenses                    1,090     715

Dividends                                         200

Prepare the journal entries and consolidating entries for the end of year 1 and the resulting consolidated trial balance.