On January 1, 2017, Prestige Corporation acquired 100 percent of the voting stock of Stylene Corpora

On January 1, 2017, Prestige Corporation acquired 100 percent of the voting stock of Stylene Corporation in exchange for $2,343,000 in cash and securities. On the acquisition date, Stylene had the following balance sheet: Accounts payable $ 2,151,000 Cash Accounts receivable Inventory Equipment (net) Trademarks $ 33,000 100,000 238,000 2,420,000 1,018,000 $ 3,809,000 Common stock Retained earnings 800,000 858,000 $ 3,809,000 At the acquisition date, the book values of Stylene&#39;s assets and liabilities were generally equivalent to their fair values except for the following assets: Asset Equipment Customer lists Trademarks Book Value $ 2, 420,000 Fair Value $2,619,000 193,000 1,107,000 Remaining Useful Life 8 years 4 years indefinite 1,018,000 During the next two years, Stylene has the following income and dividends in its own separately prepared financial reports to its parent 2017 2018 Net Income Dividends $ 273,000 $25,000 538,000 45,000 Dividends are declared and paid in the same period. The December 31, 2018, separate financial statements for each company appear below. Parentheses indicate credit balances. Prestige Stylene $ (2,914,000) 2,060,000 316,000 $ (5,700,000) 3,050,000 580,000 161,000 (464,875) $ (2,373, 875) $ (538,000) $ (3,580,000) (2,373, 875) 150,000 $ (5,803, 875) $(1,106,000) (538,000) 45,000 $ (1,599,000) Income Statement Revenues Cost of goods sold Depreciation expense Amortization expense Equity earnings in Stylene Net income Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 Balance Sheet Cash Accounts receivable Inventory Investment in Stylene Equipment Customer lists Trademarks Goodwill Total assets Accounts payable Common stock Retained earnings, 12/31 Total liabilities and equity $ 58,500 106,500 574,000 1,635,000 850,000 576,000 830,000 949,000 2,937, 750 6,700,000 163,000 2,520,000 227,000 $ 14,902,750 $ (598,875) (8,500,000) (5,803,875) $(14,902,750) $ 3, 224,000 $ (825,000) (800,000) (1,599,000) $ (3, 224,000) a. Determine the fair value in excess of book value for Prestige&#39;s acquisition date investment in Stylene. b. Determine Prestige&#39;s December 31, 2018, Investment in Stylene balance. c. Prepare a worksheet to determine the balances for Peregrine&#39;s December 31, 2018, consolidated financial statements. Complete this question by entering your answers in the tads below. Required A Required B Required C Determine the fair value in excess of book value for Prestige&#39;s acquisition date investment in Stylene. Fair value in excess of book value Required A Required B > Required A Required B Required C Determine Prestige&#39;s December 31, 2018, Investment in Stylene balance. Investment in Stylene < Required A Required c > $ (2,914,000) 2,060,000 316,000 Sales Cost of goods sold Depreciation expense Amortization expense Equity earnings Net income $ (5,700,000) 3,050,000 580,000 161,000 (464,875) $ (2,373,875) 01 $ (538,000) Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 (3,580,000) (2,373,875) 150,000 $ (5,803,875) (1,106,000) (538,000) 45,000 $ (1,599,000) $ 58,500 106,500 574,000 Balance Sheet Cash Accounts receivable Inventory Investment in Stylene Equipment (net) Customer lists Trademarks Goodwill Total assets 576,000 830,000 949,000 2,937,750 6,700,000 163,000 2,520,000 227,000 $ 14,902,750 1,635,000 850,000 $ 3,224,000 (825,000) Accounts payable Common stock – Prestige Common stock – Stylene (598,875) (8,500,000) (800,000)|

 

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