a, Cash paid

FV of shares issued
Consideration transferred
FV of net assets acquired
Goodwill

Cash
Receivable
Inventory
Patents
Customer relationships
Equiqment
Goodwill
AP
Long-term liabilities
Cash (paid)
Common stock (face value)
Additional paid in capital

b, FV of reporting unit as a who

FV of reporting units net asse
Impaired FV of goodwill
BV of goodwill
Goodwill impairment loss
 $ 450,000
FV of shares issued $ 1,248,000
Consideration transferred $ 1,698,000
FV of net assets acquired $ 1,298,000
$ 400,000

$ 75,000
Receivable $ 193,000
$ 281,000
$ 525,000
Customer relationships $ 500,000
Equiqment $ 295,000
$ 400,000
$ 121,000
Long-term liabilities $ 450,000
Cash (paid) $ 450,000
Common stock (face value) $ 104,000
Additional paid in capital $ 1,144,000

FV of reporting unit as a whole $ 1,425,000

FV of reporting units net assets $ 1,325,000
Impaired FV of goodwill $ 100,000
BV of goodwill $ 400,000
Goodwill impairment loss $ (300,000)
 Book value of Abernethy
AP
AR
Buildings
Cash and short-term investm
Equipment (net)
Inventory
Land
Long-term liabilities (mature
Supplies
Total BV

FV
BV
Excess of FV over BV
Land
Buildings
Equipment
Goodwill

31/12/2017 31/12/18
Entry S Common stock 250000 Entry S Common stock
Additional paid-in capital 50000 Additional paid-in capital
RE 100000 RE
Investment 400000

Entry A Land 10000 Entry A Land

Buildings 40000 Buildings
Goodwill 60000 Goodwill
Equipment 20000
Investment 90000

Entry E Equipment 4000 Entry E Equipment

Depreciation expense 6000 Depreciation expense
Buildings 10000

Entry I Equity in Subsidiary Earnings 74000 Entry I Equity in Subsidiary Earnings

Investment 74000 Investment

Entry D Investment 10000 Entry D Investment

Dividends Declared 10000
ok value of Abernethy
-50000
40000
120000
h and short-term investments 60000
uipment (net) 200000
90000
80000
g-term liabilities (mature 12/31/20) -150000
10000
400000

490000
400000
ess of FV over BV 90000
10000
40000
-20000
60000

mmon stock 250000

ditional paid-in capital 50000
170000
Investment 470000

10000
30000
60000
Equipment 16000
Investment 84000

4000
preciation expense 6000
Buildings 10000

uity in Subsidiary Earnings 104000

104000

30000
Dividends Declared 30000
Cash
BV
Excess of FV over BV
Assign to
Equipment
LT Liabilities
Goodwill

12/1/2017 Entry S

Entry A

Entry I

Entry E
(Amor L)

12/31/2018 Entry C*

Entry S

Entry A

Entry I

Entry E
(Amor L)
 500,000
400000
100,000
Amor
20000 5 4000
30000 4 7500
50,000 11500

Common stock 250000

APIC 50000
RE 100000
Investment 400000

Equipment 20000
LT Liabilities 30000
GW 50000
Investment 100000

Dividend income 10000

Dividend paid 10000

Depreciation exp 4000

Interest exp 7500
Equipment 4000
LT Liabilities 7500

Investment 58500
RE (Parents) 58500

Common stock 250000

APIC 50000
RE 170000
Investment 470000

Equipment 16000
LT Liabilities 22500
GW 50000
Investment 88500

Dividend income 30000

Dividend paid 30000

Depreciation exp 4000

Interest exp 7500
Equipment 4000
LT Liabilities 7500
 Amor 16,17
Amor 16,17

a, Sea cliff acquisition date FV (Purchase consideration) 6,000,000

Less BV at acquisition 2,500,000
Excess of FV over BV 3,500,000
Assigned to specific accounts
Patented tech 2,100,000 7 300,000
 Comp Software 1,200,000 12 100,000
Amortization 400,000
Goodwill 200,000

Equity earnings in Seacliff 575,000

Investment in Seacliff
Purchase price 1/1/16 6,000,000
Equity earnings net of amortization 16 500,000
Equity earnings net of amortization 17 540,000
Equity earnings net of amortization 18 575,000
Less Dividend 16-18 450,000
Investment balance 31/12/18 7,165,000
 Persoff Corporation and Consolidated Subsidiary
Consolidated Worksheet 31/12/2018
Persoff Seacliff DR CR
Income statement
Revenues (2,720,000) (2,250,000)
COGS 1,350,000 870,000
Depreciation exp 275,000 380,000
Amortization exp 370,000 25,000 400,000
Equity earnings in Sea Cliff (575,000) 575,000
Net income (1,300,000) (975,000)

Statement of RE
RE 1/1 (7,470,000) (3,240,000) 3,240,000
Net income (1,300,000) (975,000)
Dividend declared 600,000 150,000 150,000
RE 31/12 (8,170,000) (4,065,000)

Balance Sheet
Current assets 490,000 375,000
Investment in Sea Cliff 7,165,000 150,000 4,040,000
2,700,000
575,000
Comp Software 300,000 45,000 1,000,000 100,000
Patented Tech 800,000 80,000 1,500,000 300,000
Goodwill 100,000 - 200,000
Equipment 1,835,000 4,500,000
Total assets 10,690,000 5,000,000
Liabilities (520,000) (135,000)
Common stock (2,000,000) (800,000) 800,000
RE 31/12 (8,170,000) (4,065,000)
Total Liabilities and equity (10,690,000) (5,000,000)

Entry S Common stock 800,000

RE 3,240,000
Investment 4,040,000

Entry A Goodwill 200,000

Patent Tech 1,500,000
Computer Software 1,000,000
Investment 2,700,000

Entry I Equity earnings 575,000

Investment 575,000
Entry D Investment 150,000
Dividend declared 150,000

Entry E Amortisation expense 400,000

Patent Tech 300,000
Computer Software 100,000
Consolidated

$ (4,970,000)
$ 2,220,000
$ 655,000
$ 795,000
$ -
$ (1,300,000)

$ (7,470,000)
$ (1,300,000)
$ 600,000
$ (8,170,000)

$ 865,000
$ -

$ 1,245,000
$ 2,080,000
$ 300,000
$ 6,335,000
$ 10,825,000
$ (655,000)
$ (2,000,000)
$ (8,170,000)
$ (10,825,000)
 Revenues
COGS
Amortisation expense
Dividend income
Net income

RE 1/1

Net income
Dividend declared
RE 31/12

Cash
Receivables
Inventory
Investment in Aaron

Copyrights
Royalty agreements
Trademarks
Total assets

Liabilities
Preferred stock
Common stock
Additional paid in capital
RE 31/12
Total Liabilities and Equity

Entry C*

Entry S
Purchase consideration 470,000
BV at acquisition 360,000
Excess of FV over BV 110,000
Assigned to Amortisation
Royalty 60,000 6 10,000 Entry A
Trademark 50,000 10 5,000
Goodwill -

Entry I
Entry E
 Michael Company and Consilidated Subsidiary
Consolidated Worksheet 31/12/2018
Michael Aaron DR CR Consolidated
(610) (370) (980)
270 140 410
Amortisation expense 115 80 15 210
Dividend income (5) - 5 -
Net income (230) (150) (360)

(880) (490) 490 200 (1,080)

Net income (230) (150) (360)

Dividend declared 90 5 5 90
(1,020) (635) (1,350)

110 15 125
Receivables 380 220 600
560 280 840
Investment in Aaron 470 - 200 620 -
50
Copyrights 460 340 800
Royalty agreements 920 380 20 10 1,310
Trademarks - - 30 5 25
Total assets 2,900 1,235 3,700

(780) (470) (1,250)

Preferred stock (300) (300)
Common stock (500) (100) 100 (500)
Additional paid in capital (300) (30) 30 (300)
(1,020) (635) (1,350)
Total Liabilities and Equity (2,900) (1,235) (3,700)

Investment 200
RE (M) 200

Common stock 100

APIC 30
RE 490
Investment 620

Trademarks 30
Royalty 20
Investment 50

Dividend income 5
 Dividend declared 5

Amortisation expense 15
Royalty 10
Trademark 5