Business, 11.02.2021 22:00 rbgrh8183

On January 1, 2019, Roxy Corp. issued shares of its common stock to acquire all of the outstanding common stock of Westwood Inc. Westwood's book value was only $140,000 at the time, but Roxy issued 12,000 shares having a par value of $1 per share and a fair value of $20 per share. Roxy was willing to convey these shares because it felt that buildings (ten-year life) were undervalued on Westwood's records by $60,000 while equipment (five-year life) was undervalued by $25,000. Any consideration transferred over fair value of identified net assets acquired is assigned to goodwill. Following are the individual financial records for these two companies for the year ended December 31, 2022.
Roxy Westwood
Corp. Inc.
Revenues $372,000 $108,000
Expenses (264,000) (72,000)
Equity in subsidiary earnings 25,000 0
Net income $133,000 $36,000
Retained earnings,
January 1, 2022 $765,000 $102,000
Net income (above) 133,000 36,000
Dividends paid (84,000) (24,000)
Retained earnings,
December 31, 2022 $814,000 $114,000
Current assets $150,000 $22,000
Investment in Westwood Inc. 242,000 0
Buildings (net) 525,000 85,000
Equipment (net) 389,250 129,000
Total assets $1,306,250 $236,000
Liabilities $82,250 $50,000
Common stock 360,000 72,000
Additional paid-in capital 50,000 0
Retained earnings, December
31, 2022 (above) 814,000 114,000
Total liabilities and
stockholders’ equity $1,306,250 $236,000
Required:
1. Prove investment bal in Westwood $242,000
2. Prepare a consolidation worksheet Entries (only entries S, A, I, D, E, or P if necessary; no need for whole worksheet) for this business combination.

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On January 1, 2019, Roxy Corp. issued shares of its common stock to acquire all of the outstanding c...

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