Reference no: EM132797429
Problem - On January 1, 2018, Pride, Inc. acquired 80% of the outstanding voting common stock of Strong Corp. for $364,000. The non-controlling interest had a fair value of $91,000 on that day. However, equipment in Strong's record was undervalued by $35,000 (with a five-year life). Any remaining excess was attributable to goodwill which has not been impaired.
As of December 31, 2018, before Preparing the consolidated worksheet, the financial statements appeared as follows:
|
|
Pride Inc
|
Strong Corp
|
|
Revenues
|
$420,000
|
$280,000
|
|
Cost of goods sold
|
(196,000)
|
(112,000)
|
|
Operating expenses
|
(28,000)
|
(14,000)
|
|
Net income
|
196,000
|
154,000
|
|
Retained earnings, 1/1/13
|
420,000
|
210,000
|
|
Net income (above)
|
196,000
|
154,000
|
|
Dividends paid
|
0
|
0
|
|
Retained earnings, 12/31/13
|
616,000
|
364,000
|
|
Cash and receivables
|
294,000
|
126,000
|
|
Inventory
|
210,000
|
154,000
|
|
Investment in Strong Corp
|
364,000
|
0
|
|
Equipment (net)
|
616,000
|
420,000
|
|
Total assets
|
1,484,000
|
700,000
|
|
Liabilities
|
588,000
|
196,000
|
|
Common stock
|
280,000
|
140,000
|
|
Retained earnings, 12/31/13 (above)
|
616,000
|
364,000
|
|
Total liabilities and stockholder's equity
|
$1,484,000
|
$700,000
|
During 2018, Strong bought inventory for $112,000 and sold it to Pride for $140,000. 60% of these goods were still in the company's possession on December 31, 2018.
Required -
1. What is the consolidated total for equipment (net) at December 31, 2018?
2. What is the consolidated total for inventory at December 31, 2018?