Prepare consolidation worksheet for the business combination

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Reference no: EM132474179

Point 1: On January 1, 2015, Gold Corp. issued shares of its common stock to acquire all of the outstanding common stock of Silver Inc. Silver's book value was only $250,000 at the time, but Gold issued 12,000 shares having a par value of $1 per share and a fair value of $35 per share. Gold was willing to convey these shares because it felt that buildings (ten-year life) were undervalued on Silver's records by 570,000 while equipment (9-year life) was undervalued by $63,000. Any consideration transferred over fair value of identified net assets acquired is assigned to goodwill.

Following are the individual financial records for these two companies for the year ended December 31, 2018.

31-Dec-18	GOLD	SILVER
Revenues	400,000	193,000
Expenses	(273,000)	(150,000)
Equity In Investee earnings	29,000
Net income	156,000	43,000
Retained earnings, January 1, 2018	765,000	380.000
Net income (above)	156,000	43,000
Dividends paid	184,000)	(24,000)
Retained earnings, December 31, 2018	837,003	399.000
Current assets	250.030	63,000
Investment in Silver Inc.	583,000
Buildings (net)	517,000	176,000
Equipment (net)	316,250	250,000
Total Assets	1,666,250	489,000
Liabilities	76,150	20,000
Common Stock	200,000	70,000
APIC	553.100
Retained Earnings, December 31, 2018 (above)	837,030	399,000
Total Liabilities and SE	1.666,250	489.000

Required:

Question 1: Prepare a consolidation worksheet for the business combination.

Reference no: EM132474179

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