Allison Corporation Acquired 90 Percent Of Bretton On January 1 2016

Allison Corporation acquired 90 percent of Bretton on January 1, 2016. Of Bretton’s total acquisition-date fair value, $60,000 was allocated to undervalued equipment (with a 10-year remaining life) and $80,000 was attributed to franchises (to be written off over a 20-year period).

Since the takeover, Bretton has transferred inventory to its parent as follows:

YearCostTransfer PriceRemaining at Year-End2016$45,000$90,000$30,000 (at transfer price)2017 48,000 80,000 35,000 (at transfer price)2018 69,000 92,000 50,000 (at transfer price) 

On January 1, 2017, Allison sold Bretton a building for $50,000 that had originally cost $70,000 but had only a $30,000 book value at the date of transfer. The building is estimated to have a five-year remaining life (straight-line depreciation is used with no salvage value).

Selected figures from the December 31, 2018, trial balances of these two companies are as follows:

 AllisonBrettonSales$700,000$400,000Cost of goods sold 440,000 220,000Operating expenses 120,000 80,000Investment incomeNot given 0Inventory 210,000 90,000Equipment (net) 140,000 110,000Buildings (net) 350,000 190,000 

Determine consolidated totals for each of these account balances.

Sales

COGS

Operating expenses

Investment income

Inventory

Equipment

Buildings

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