On January 1, 2012, 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:

At the acquisition date, the following allocation was prepared:

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 2012, it was apparent that the research project was a failure with no future economic benefits.
On December 31, 2013, Picante and Salsa submitted the following trial balances for consolidation:

a. Show how Picante derived its December 31, 2013, Investment in Salsa account balance.
b. Prepare a consolidated worksheet for Picante and Salsa as of December 31, 2013.

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14,000 100,000 700,000 1,886,000 $2,700,000 Cash. Accounts payable . Long-term debt Common stock Retained earnings s 120,000 930,000 1,000,000 650,000 $2,700,000 Land 1,765,000 1,650,000 115,000 Fair value of consideration transferred Excess fair value over book value To in-process research and development To equipment (8-year remaining life) To goodwill (indefinite life). $44,000 14),0) S 15,000 Cost of goods sold Depreciation expense Subsidiary income $ (3,500,000) $(1,000,000) 630,000 160,000 1,600,000 540,000 (203,000) Net income. Retained earnings 1/1/13 Net income Dividends paid S (1563,000) (210,000) $ (3,000,000) (800,000) (210,000) 25,000 $ (4,363,000) (985,000) S 228,000 50,000 155,000 (1,563,000) 200,000 Retained earnings 12/31/13 Cash Accounts receivable 840,000 900,000 2,042,000 3,500,000 5,000,000 290,000 Investment in Salsa. 700,000 1,700,000 Equipment (net) Total assets Accounts payable Long-term debt $ 12,800,000 3,185,000 $ (193,000) 400,000) (800,000) 5,150,000) (1,000,000) (985,000) 12,800,000) (3,185,000) (3,094,000) Common stock Retained earnings 12/31/13 4,363,000) Total liabilities and equities