Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Exercise 33

Parker, Inc..acquires 70 percent of Sawyer Company for $420,000.The remaining.30 percent of Sawyer's outstanding shares continue to trade at a collective value of $174,000.On the acquisition date, Sawyer has the following accounts: The buildings have a 10-year life.In addition, Sawyer holds a patent worth $140,000 that has a five-year life but is not recorded on its financial records.At the end of the year, the two companies report the following balances: a.Assume that the acquisition took place on January 1.What figures would appear in a consolidated income statement for this year
b.Assume that the acquisition took place on April 1.Sawyer's revenues and expenses occurred uniformly throughout the year.What amounts would appear in a consolidated income statement for this year