On January 1, 2013, Pilgrim Imaging purchased 90% of the outstanding common stock of Snapshot Productions for $585,000 cash. The remaining 10% of Snapshot had an assessed fair value of $65,000 at that time. Snapshot had equipment that was undervalued on their books by $50,000, and an unrecorded patent with a fair value of $15,000. The equipment had five years remaining to its useful life, and the patent had 10 years remaining to its useful life.
On January 1, 2014, Pilgrim sold Snapshot a building for $100,000 that had originally cost $140,000. The book value was $60,000 at the date of transfer, and had a five-year remaining life at the date of transfer. Straight-line depreciation is used with no salvage value. Several line items from the companies' separate December 31, 2014 trial balances are shown below.
Required: Determine consolidated balances for each of the accounts listed as of December 31, 2014.

Question

On January 1, 2013, Pilgrim Imaging purchased 90% of the outstanding common stock of Snapshot Productions for $585,000 cash. The remaining 10% of Snapshot had an assessed fair value of $65,000 at that time. Snapshot had equipment that was undervalued on their books by $50,000, and an unrecorded patent with a fair value of $15,000. The equipment had five years remaining to its useful life, and the patent had 10 years remaining to its useful life.
On January 1, 2014, Pilgrim sold Snapshot a building for $100,000 that had originally cost $140,000. The book value was $60,000 at the date of transfer, and had a five-year remaining life at the date of transfer. Straight-line depreciation is used with no salvage value. Several line items from the companies' separate December 31, 2014 trial balances are shown below.
  Required: Determine consolidated balances for each of the accounts listed as of December 31, 2014.

Quizplus · Accepted Answer

The Answer of On January 1, 2013, Pilgrim Imaging purchased 90% of the outstanding common stock of Snapshot Productions for $585,000 cash. The remaining 10% of Snapshot had an assessed fair value of $65,000 at that time. Snapshot had equipment that was undervalued on their books by $50,000, and an unrecorded patent with a fair value of $15,000. The equipment had five years remaining to its useful life, and the patent had 10 years remaining to its useful life.
On January 1, 2014, Pilgrim sold Snapshot a building for $100,000 that had originally cost $140,000. The book value was $60,000 at the date of transfer, and had a five-year remaining life at the date of transfer. Straight-line depreciation is used with no salvage value. Several line items from the companies' separate December 31, 2014 trial balances are shown below.
  Required: Determine consolidated balances for each of the accounts listed as of December 31, 2014.

On January 1, 2013, Pilgrim Imaging Purchased 90% of the Outstanding