On January 1, 2014, Peregrine Corporation acquired 100 percent of the voting stock of Osprey Corporation in exchange for $2,017,000 in cash and securities. On the acquisition date, Osprey had the following balance sheet:

At the acquisition date, the carrying amounts of Osprey’s assets and liabilities were generally equivalent to their fair values except for the following assets:

During the next two years, Osprey has the following income and dividends in its own separately prepared financial reports to its parent.

Dividends are declared and paid in the same period. The December 31, 2015, separate financial statements for each company appear below. Parentheses indicate credit balances.

a. Prepare Peregrine’s acquisition-date fair-value allocation schedule for its investment in Osprey.
b. Show how Peregrine determined its December 31, 2015, Investment in Osprey balance.
c. Prepare a worksheet to determine the balances for Peregrine’s December 31, 2015, consolidated financial statements.

  • CreatedJanuary 08, 2015
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