Question

Constructing the Consolidated Balance Sheet at Acquisition
On January 1 of the current year, Healy Company purchased all of the common shares of Miller Company for $500,000 cash. Balance sheets of the two firms immediately after the acquisition follow:

During purchase negotiations, Miller's plant assets were appraised at $425,000 and all of its remaining assets and liabilities were appraised at values approximating their book values. Healy also concluded that an additional $45,000 (for goodwill) demanded by Miller's shareholders was warranted because Miller's earning power was better than the industry average. Prepare the consolidating adjustments and the consolidated balance sheet at acquisition.

	Healy	Miller	Consolidating adjustments	Consolidated
Current assets	$1,700,000	$120,000	Answer	$Answer
Investment in Miller	500,000	-	Answer	Answer
Plant assets, net	3,000,000	410,000	Answer	Answer
Goodwill	-	-	Answer	Answer
Total assets	$5,200,000	$530,000		$Answer
Liabilities	$ 700,000	$ 90,000	Answer	$Answer
Contributed capital	3,500,000	400,000	Answer 0.00 points out of 1.00	Answer 0.00 points out of 1.00
Retained earnings	1,000,000	40,000	Answer	Answer 0.00 points out of 1.00
Total liabilities & stockholders' equity	$5,200,000	$530,000		$Answer

Please answer all parts that say answer

Answer 1

	Healy	miller	consolidating adjustment	consolidated
Current assets	$1,700,000	$120,000	0	$1,820,000
Investment in miller	$5,00,000	-	($5,00,000)	0
Plant asset, net	$3,000,000	$4,10,000	$15,000	$3,425,000
Goodwill	-	-	$45,000	$45,000
Total assets	$5,200,000	$5,30,000		$5,290,000
Liabilities	$7,00,000	$90,000	0	$790,000
Contributed capital	$3,500,000	$4,00,000	($4,00,00)	$3,500,000
Retained earnings	$1,000,000	$40,000	($40,000)	$1,000,000
Total liability and stock holder equity	$5,200,000	$5,30,000		5,290,000

Note:-

1)current assets = 1,700,000 + 120,000=1,820,000

2) Investments= adjustment of common share purchsed by healy company of miller company for $5,00,000

3) plant asset, net= $425000 - 410,000 = $15,000,

3,000,000 + 4,10,000 + 15,000 = $3,425,000

4) Goodwill - Healy concluded additional $45000 (for goodwill) demanded by Miller shareholder

5) Liabilities= $7,00,000 + 90,000 = 790,000