Maryhill Corp. purchased all of Hood River Company’s common stock for $3,612,000 cash on January 1. When analyzing the purchase price, Maryhill Corp. determined that the other assets of Hood River were undervalued by $633,600 and that the company had an unrecorded liability of $240,000 related to ongoing litigation. Any excess purchase price was for goodwill.
Use the following table to consolidate the balance sheets of the two companies as of the acquisition date.
|
Maryhill |
Hood River |
Consolidating Adjustments |
Consolidated Balance Sheet |
|
|
Investment in Hood River |
$3,612,000 |
|||
|
Other assets |
6,156,000 |
$2,452,800 |
||
|
Goodwill |
||||
|
Total assets |
$9,768,000 |
$2,452,800 |
||
|
Liabilities |
$4,060,800 |
$1,166,400 |
||
|
Common stock |
2,052,000 |
540,000 |
||
|
Retained earnings |
3,655,200 |
746,400 |
||
|
Total Liabilities & Equity |
$9,768,000 |
$2,452,800 |
