Fundamentals of Advanced Accounting 5th Edition by Joe Ben Hoyle,Thomas Schaefer,Timothy Doupnik

Exercise 57

Adams Corporation acquired 90 percent of the outstanding voting shares of Barstow, Inc., on December 31, 2011. Adams paid a total of $603,000 in cash for these shares. The 10 percent noncontrolling interest shares traded on a daily basis at fair value of $67,000 both before and after Adams's acquisition. On December 31, 2011, Barstow had the following account balances:

a. Prepare schedules for acquisition-date fair-value allocations and amortizations for Adams's investment in Barstow.
b. Determine Adams's method of accounting for its investment in Barstow. Support your answer with a numerical explanation.
c. Without using a worksheet or consolidation entries, determine the balances to be reported as of December 31, 2013, for this business combination.
d. To verify the figures determined in requirement ( c ) , prepare a consolidation worksheet for Adams Corporation and Barstow, Inc., as of December 31, 2013.