2.99 See Answer

Question: Adams Corporation acquired 90 percent of the


Adams Corporation acquired 90 percent of the outstanding voting shares of Barstow, Inc., on December 31, 2019. Adams paid a total of $603,000 in cash for these shares. The 10 percent non- controlling interest shares traded on a daily basis at fair value of $67,000 both before and after Adams’s acquisition. On December 31, 2019, Barstow had the following account balances:



Adams Corporation acquired 90 percent of the outstanding voting shares of Barstow-1

December 31, 2021, adjusted trial balances for the two companies follow:



Adams Corporation acquired 90 percent of the outstanding voting shares of Barstow-2

At year-end, there were no intra-entity receivables or payables.
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, 2021, 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, 2021.

2.99

See Answer