Question: On January 1 2010 Picante Corporation acquired 100 percent of

On January 1, 2010, Picante Corporation acquired 100 percent of the outstanding voting stock of Salsa Corporation for $1,765,000 cash. On the acquisition date, Salsa had the following balance sheet:

Although at acquisition date Picante had expected $44,000 in future benefits from Salsa’s in process research and development project, by the end of 2010, it was apparent that the research project was a failure with no future economic benefits.
On December 31, 2011, Picante and Salsa submitted the following trial balances for consolidation:

a. Show how Picante derived its December 31, 2011, Investment in Salsa account balance.
b. Prepare a consolidated worksheet for Picante and Salsa as of December 31,2011.

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  • CreatedOctober 04, 2014
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