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The following information applies to Questions 21-25.

On January 1, 2020, Adamson, Inc. acquired the outstanding voting common stock of Skyview Corp. for $600,000. Of this payment, $85,000 was allocated to undervalued equipment (with a five-year life). Any remaining excess was attributable to goodwill.

During 2020, Adamson bought inventory for $44,000 and sold it to Skyview for $98,500. 60% of these goods were still in the company's possession on December 31. The financial statements of the two companies as of December 31, 2020 are presented below.

	Adamson	Skyview
Sales revenue	$750,000	$440,000
Cost of goods sold	-414,975	-69,000
Gross profit	335,025	371,000
Operating expenses	-65,000	-75,000
Income (loss) from subsidiary	246,300	0
Net Income	$516,325	$296,000
Retained Earnings, 1/1/20	$670,000	$258,000
Net income	516,325	296,000
Dividends	-15000	-12000
Retained Earnings, 12/31/20	$1,171,325	$542,000
Cash and receivables	$325,000	$90,000
Inventory	440,000	126,000
Equity investment	834,300
Property, plant & equipment (Net)	1,273,025	635,000
Total Assets	$2,872,325	$851,000
Accounts payable	$652,000	$75,000
Accrued liabilities	245,000	56,000
Common stock	152,000	34,000
Additional paid-in capital	652,000	144,000
Retained Earnings, 12/31/20	1,171,325	542,000
Total Liabilities and Equities	$2,872,325	$851,000

21.      What is consolidated revenues? b.   $1,091,500

22.      What is consolidated operating expenses? d. $157,000

23.      What is consolidated cost of goods sold? a.   $418,175

24.      What is the consolidated balance for property, plant and equipment (net) on the December 31, 2020 balance sheet? b. $1,976,025

25.      What is consolidated inventory on the December 31, 2020 balance sheet? b.   $533,300

Answer rating: 100% (QA)

SOLUTION Heres how each question is solved 21 Consolidated revenues To calculate consolidated revenu... View the full answer