9 Angela Corporation (a private company) acquired all of the outstanding voting stock of Eddy Tech, Inc., on January 1, 2021, In exchangefor $9,000,000 in cash. At the acquisition date, Eddy Tech's stockholders' equity was $7,200,000 Including retained earnings of$3,000,000.At the acquisition date, Angela prepared the following fair value allocation schedule for its newly acquired subsidiary:Consideration transferredEddy's stockholder's equityExcess fair over book valueto patented technology (5-year remaining life)to trade names (indefinite remaining life)to equipment (8-year remaining life)Goodwill$ 150,000500,00050,000SalesCost of goods soldDepreciation expenseAmortization expenseOther operating expensesNet income$ 9,000,0007,200,000$ 1,800,000At the end of 2021, Angela and Eddy Tech report the following amounts from their individually maintained account balances, beforeconsideration of their parent-subsidiary relationship. Parentheses Indicate a credit balance.AngelaEddy Tech$ (7,850,000) $ (2,400,000)4,200,0001,300,000425,00048,000250,00012,00075,00053,750$ (2,900,000) $(986,250)700,000$ 1,100,000Required:Prepare a 2021 consolidated Income statement for Angela and its subsidiary Eddy Tech. Assume that Angela, as a private company,elects to amortize goodwill over a 10-year period.

The summarized financial statements of an organization including balances of both parent as well as…

Answered: Required: Prepare a 2021 consolidated…

Required: Prepare a 2021 consolidated Income statement for Angela and its subsidiary Eddy Tech. Assume that Angela, as a private company, elects to amortize goodwill over a 10-year period.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 30E

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Angela Corporation (a private company) acquired all of the outstanding voting stock of Eddy Tech, Inc., on January 1, 2018, in exchange for $9,000,000 in cash. At the acquisition date, Eddy Tech’s stockholders’ equity was $7,200,000 including retained earnings of $3,000,000. At the acquisition date, Angela prepared the following fair value allocation schedule for its newly acquired subsidiary: At the end of 2018, Angela and Eddy Tech report the following amounts from their individually maintained account balances, before consideration of their parent-subsidiary relationship. Parentheses indicate a credit balance. Required: Prepare a 2018 consolidated income statement for Angela and its subsidiary Eddy Tech. Assume that Angela, as a private company, elects to amortize goodwill over a 10-year period.
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