On January 1, 2014, Bretz, Inc., acquired 60 percent of the outstanding shares of Keane Company for $573,000 in cash. The price paid was proportionate to Keane’s total fair value although at the date of acquisition, Keane had a total book value of $810,000. All assets acquired and liabilities assumed had fair values equal to book values except for a copyright (6-year remaining life) that was undervalued in Keane’s accounting records by $120,000. During 2014, Keane reported net income of $150,000 and declared cash dividends of $80,000. On January 1, 2015, Bretz bought an additional 30 percent interest in Keane for $300,000.

The following financial information is for these two companies for 2015. Keane issued no additional capital stock during either 2014 or 2015. Also, at year-end, there were no intra-entity receivables or payables.

a. Show the journal entry Bretz made to record its January 1, 2015, acquisition of an additional 30 percent of Keane Company shares.
b. Prepare a schedule showing how Bretz determined the Investment in Keane Company balance as of December 31, 2015.
c. Prepare a consolidated worksheet for Bretz, Inc., and Keane Company for December 31,2015.

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Bretz, Inc. Keane Company Revenues Operating expenses Equity in Keane earnings. . $(402,000) 200,000 (144,000) (300,000) 120,000 Net income s (346,000) (180,000) Retained earnings 1/1 Net income (above) Dividends declared ..(797,000 (500,000) (180,000) 60,000 $(1,000,000) $ (620,000) (346,000) 143,000 Retained earnings 12/31. Current assets Investment in Keane Company Trademarks. Copyrights Equipment (net) S 224,000 $ 190,000 994,500 106,000 210,000 380,000 1,914,500 600,000 300,000 110,000 Total assets Liabilities Common stock Additional paid-in capital Additional paid-in capital-step acquisition Retained earnings 12/B1 1,200,000 S (453,000) $ (200,000) (300,000) (80,000) (400,000) (60,000) (1,500) (1,000,000) (620,000) $(1,914,500) $(1,200,000)