Aline Company acquired all of Melody Company's outstanding stock on January 1, 2022, for $300,000 in cash. Melody had a book value of only $202,000 on that date. However, equipment (having an eight-year remaining life) was undervalued by $72,000 on Melody's financial records. A building with a 20-year remaining life was overvalued by $20,000. In accounting for this investment,

 

Transcribed Image Text:

Aline Company acquired all of Melody Company's outstanding stock on January 1, 2022, for $300,000 in cash. Melody had a book value of only $202,000 on that date. However, equipment (having an eight-year remaining life) was undervalued by $72,000 on Melody's financial records. A building with a 20-year remaining life was overvalued by $20,000. In accounting for this investment, Aline used the equity method. During 2022, Melody reported net income of 64,000 and declared and paid dividends of $12,000. Selected accounts taken from the financial records of these two companies as of December 31, 2022, follow Aline Revenues--- $425,000 $162,000 Melody Operating Expenses 278,000 98,000 Equity in Melody Earnings Equipment (net) Buildings (net) Common. Stock Retained earnings, 12/31/22 402,000 68,000 356,000 84,000 470,000 58,000 580,000 196,000 Determine the following account balances as of December 31, 2022 (Do not add dollar sign; do not add comma to your amount; round the answer to the whole number) 1. Consolidated Net Income [a] 2. Consolidated Equipment (net) [b] 3. Consolidated Buildings (net) [c] 4. Consolidated Goodwill (net) [d] 5. Consolidated Retained Earnings, 12/31/22. [0]

Expert Answer

Answer 1. Consolidated net income = (425,000 - 278,000) + (162,000 - 98,000) - {(72,000 / 8) - View the full answer