Bon Air, Inc., purchased 70 percent (2,800 shares) of the outstanding voting stock of Creedmoor Corporation on January 1, 2007, for $250,000 cash. Creedmoor€™s net assets on that date totaled $230,000, but this balance included three accounts having fair values that differed from their book values:

As of December 31, 2010, the two companies report the following balances:

Prepare a worksheet to consolidate these two companies as of December 31, 2010. Because Bon Air acquired Creedmoor before the effective date of the acquisition method (2009), the purchase method isappropriate.

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Land Equipment (14-year life) Liabilities (10-year life) Book Value Fair Value S30,000 40,000 118,000 (50,000) 50,000 70,000) (694,800) (250,000) 1 Operating expenses Investment income Retained earnings, 1/1/10 Net income Retained earnings, 12/B1/10 Current assets Investment in Creedmoor Corp 5 (801000) $20,000) Buildings (net) . Equipment (net) Additional paid-in capital Retained earnings, 12/31/10 Total liabilities and equities