On December 31, 2016, immediately after Todd Company’s acquisition of 80% of Keller Company, their balance sheets are as follows:
An appraisal on December 31, 2016, which is considered carefully and approved by the boards of directors of both companies, places a total replacement value, less depreciation, of $2,800,000 on Keller’s depreciable fixed assets. The remaining depreciable life is 20 years. Todd Company offers to purchase all the assets of Keller Company, subject to its liabilities, as of December 31, 2016, for $2,500,000. Some of the stockholders of Keller Company object to the price because it does not include enough consideration for goodwill. 20% of the shareholders elect not to sell their shares. A counterproposal is made to 80% of the shareholders and an agreement is reached. In exchange for its own shares, Todd acquires 8,000 shares of the common stock of Keller at the agreed-upon $280 per share. The price includes a control premium.
The shares held by the NCI are estimated to have a fair value of $250 each. The purchase is structured as a tax-free exchange to the seller; thus, Todd will use the book value of the assets for future tax purposes. The tax rate for both companies is 30%.
Prepare a consolidated worksheet and a consolidated balance sheet as of December 31, 2016.
Include a value analysis and a determination and distribution schedule.

  • CreatedApril 13, 2015
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