Using the data given in Problem assume that Adam Company purchases 80% of the common stock of Sampson Company for $380,000 cash.
The following comparative balance sheets are prepared for the two companies immediately after the purchase:

In Problem, On December 31, 2011, Adam Company purchases 100% of the common stock of Sampson Company for $475,000 cash. On this date, any excess of cost over book value is attributed to accounts with fair values that differ from book values. These accounts of Sampson Company have the following fair values:
Cash . . . . . . . . . . . . . . . . . . . . . . $ 40,000
Accounts receivable . . . . . . . . . . 30,000
Inventory . . . . . . . . . . . . . . . . . . . 140,000
Land. . . . . . . . . . . . . . . . . . . . . . . 45,000
Buildings and equipment. . . . . . . 225,000
Copyrights. . . . . . . . . . . . . . . . . . 25,000
Current liabilities . . . . . . . . . . . . . 65,000
Bonds payable . . . . . . . . . . . . . . 105,000
Required
1. Prepare the value analysis and the determination and distribution of excess schedule for the investment in Sampson Company.
2. Complete a consolidated worksheet for Adam Company and its subsidiary Sampson Company as of December 31, 2011.

Transcribed Image Text:

3 Investment in Sampson Company... Buildings and equipment Copyrights . .. Total assets.. Current liabilities 9 2 Common stock ($10 par-Adam Common stock ($5 par-Sampson Paid-in capital in excess of par Relained earnings 3 Total liabilities and equity $1,175,000 $415,000