Solved: Angela Corporation a private company acquired all

of the outstanding

Angela Corporation (a private company) acquired all of the outstanding voting stock of Eddy
Tech, Inc., on January 1, 2018, in exchange for $9,000,000 in cash. At the acquisition date,
Eddy Tech's stockholders' equity was $7,200,000 including retained earnings of $3,000,000. At
the acquisition date, Angela prepared the following fair value allocation schedule for its newly
acquired subsidiary:

Consideration transferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,000,000

Eddy's stockholder's equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7,200,000

Excess fair over book value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,800,000

To patented technology (5-year remaining life) . . . . . . . . . . . $ 150,000

To trade names (indefinite remaining life) . . . . . . . . . . . . . . . . 500,000

To equipment (8-year remaining life) . . . . . . . . . . . . . . . . . . . . 50,000 . . . . . . 700,000

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$1,100,000

At the end of 2018, Angela and Eddy Tech report the following amounts from their individually
maintained account balances, before consideration of their parent-subsidiary relationship.
Parentheses indicate a credit balance.

____________________________________________ Angela _______________ Eddy Tech

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,850,000) . . . . . . . . . . . . . (2,400,000)

Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,200,000 . . . . . . . . . . . . . . .1,300,000

Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 425,000 . . . . . . . . . . . . . . . . . 48,000

Amortization expense . . . . . . . . . . . . . . . . . . . . . . . . . . .250,000 . . . . . . . . . . . . . . . . . 12,000

Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . .75,000 . . . . . . . . . . . . . . . . . . 53,750

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,900,000) . . . . . . . . . . . . . . . (986,250)

Required:

Prepare a 2018 consolidated income statement for Angela and its subsidiary Eddy Tech.

Reach out to freelance2040@yahoo.com for enquiry.

 Assume that Angela, as a private company, elects to amortize goodwill over a 10-year period?

Angela Corporation a private company acquired all of the outstanding

ANSWER
https://solvedquest.com/angela-corporation-a-private-company-acquired-all-of-the-outstanding/

Reach out to freelance2040@yahoo.com for enquiry.

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