Group Project - Chapter 3 Computer Project PECOS COMPANY...

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Chapter 3 - Computer Project PECOS COMPANY AND SUARO COMPANY Consolidated Information Worksheet Pecos Suaro Revenues -1,052,000 -427,000 Operating expenses 821,000 262,000 Amortization of intangibles 0 Goodwill impairment loss 0 Income of Suaro 0 Net income -165,000 Retained earnings—Pecos, 1/1 Retained earnings—Suaro, 1/1 0 -201,000 Net income (above) 0 -165,000 Dividends paid 200,000 35,000 Retained earnings, 12/31 -331,000 Cash 195,000 95,000 Receivables 247,000 143,000 Inventory 415,000 197,000 Investment in Suaro 0 Land 341,000 85,000 Equipment (net) 240,100 100,000 Software 0 312,000 Other intangibles 145000 0 Goodwill 0 0 Total assets 932,000 Liabilities -1,537,100 -251,000 Common stock -500,000 -350,000 Retained earnings (above) -331,000 Total liabilities and equity -932,000 Fair Value Allocation Schedule Acquisition-date fair value 1,450,000 Book value 476,000 Excess fair value over book value 974,000 Amortizations and Write-off 2009 2010 Land -10,000 0 0
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Brand Name 60,000 0 0 Software 100,000 50,000 50,000 IPR&D 300,000 300,000 0 Goodwill 524,000 0 0 Total 974,000 350,000 50,000 Suaro's Retained Earnings Changes 2009 2010 Income 75,000 165,000 Dividends 0 35,000 Asset: ........... (Fair - book value) .................. 2009 ................ 2010 ------------------------------------------------------------------------- Land  ............. $10,000 ................................. $0 .................... $0 Brand name...$60,000 ................................. $0 .................... $0 Goodwill ......... $524,000 ............................... $0 .................... $0 I P R&D .......... $300,000 ............................... $300,000 ......... $0 Software ........ $100,000 ............................... $50,000 ........... $50,000 --------------------------------------------------------------------------- Total .............. $974,000 ................................ $350,000 .......... $50,000 I P R&D is all written off for yr2009, $300,00, since the project was a failure has no future economic bene Land & Goodwill are not amortized due to indefinite useful life. Brand Name is not amortized nor written off since is not in Suaro's book.
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PECOS COMPANY AND SUARO CO Consolidated Worksheet For the Year Ended December 31 EQUITY METHOD Pecos Suaro Revenues -1,052,000 -427,000 Operating expenses 821,000 262,000 (E) Amortization of intangibles 0 Goodwill impairment loss 0 Income of Suaro -115,000 0 (I) Net income -346,000 -165,000 Retained earnings—Pecos, 1/1 -655,000 0
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