Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Exercise 23

Purchase Method
Use the same information as presented in problem 27 but assume that Arlington pays cash of $2.3 million.No stock is issued.An additional $40,000 is paid in direct combination costs.For each of the following accounts, determine what balance would be included in a February 1 consolidation.
a.Goodwill.
b.Expenses.
c.Retained Earnings, 1/1.
d.Buildings.