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Parker, Inc., acquires 70 percent of Sawyer Company for $420,000.

Parker, Inc., acquires 70 percent of Sawyer Company for $420,000. The remaining 30 percent of Sawyer’s outstanding shares continue to trade at a collective value of $174,000. On the acquisition date, Sawyer has the following accounts:BookValueFairValueCurrent assets . . . . . . . . . . . . . . . . . . . . . . . . .$ 210,000$ 210,000Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .170,000180,000Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .300,000330,000Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(280,000)(280,000)The buildings have a 10-year life. In addition, Sawyer holds a patent worth $140,000 that has a five-year life but is not recorded on its financial records. At the end of the year, the two com- panies report the following balances:ParkerSawyerRevenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$(900,000)$(600,000)Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .600,000400,000a. Assume that the acquisition took place on January 1. What figures would appear in a con- solidated income statement for this year?b. Assume that the acquisition took place on April 1. Sawyer’s revenues and expenses occurred uniformly throughout the year. What amounts would appear in a consolidated income statement for this year?

Parker, Inc., acquires 70 percent of Sawyer Company for $420,000. The remaining 30 percent of Sawyer’s outstanding shares continue to trade at a collective value of $174,000. On the acquisition date, Sawyer has the following accounts:BookValueFairValueCurrent assets . . . . . . . . . . . . . . . . . . . . . . . . .$ 210,000$ 210,000Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .170,000180,000Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .300,000330,000Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(280,000)(280,000)The buildings have a 10-year life. In addition, Sawyer holds a patent worth $140,000 that has a five-year life but is not recorded on its financial records. At the end of the year, the two com- panies report the following balances:ParkerSawyerRevenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$(900,000)$(600,000)Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .600,000400,000a. Assume that the acquisition took place on January 1. What figures would appear in a con- solidated income statement for this year?b. Assume that the acquisition took place on April 1. Sawyer’s revenues and expenses occurred uniformly throughout the year. What amounts would appear in a consolidated income statement for this year?

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Parker, Inc., acquires 70 percent of Sawyer Company for $420,000. The remaining 30 percent of Sawyer’s outstanding shares continue to trade at a collective value of $174,000. On the acquisition date, Sawyer has the following accounts:BookValueFairValueCurrent assets . . . . . . . . . . . . . . . . . . . . . . . . .$ 210,000$ 210,000Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .170,000180,000Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .300,000330,000Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(280,000)(280,000)The buildings have a 10-year life. In addition, Sawyer holds a patent worth $140,000 that has a five-year life but is not recorded on its financial records. At the end of the year, the two com- panies report the following balances:ParkerSawyerRevenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$(900,000)$(600,000)Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .600,000400,000a. Assume that the acquisition took place on January 1. What figures would appear in a con- solidated income statement for this year?b. Assume that the acquisition took place on April 1. Sawyer’s revenues and expenses occurred uniformly throughout the year. What amounts would appear in a consolidated income statement for this year?

Parker, Inc., acquires 70 percent of Sawyer Company for $420,000. The remaining 30 percent of Sawyer’s outstanding shares continue to trade at a collective value of $174,000. On the acquisition date, Sawyer has the following accounts:BookValueFairValueCurrent assets . . . . . . . . . . . . . . . . . . . . . . . . .$ 210,000$ 210,000Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .170,000180,000Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .300,000330,000Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(280,000)(280,000)The buildings have a 10-year life. In addition, Sawyer holds a patent worth $140,000 that has a five-year life but is not recorded on its financial records. At the end of the year, the two com- panies report the following balances:ParkerSawyerRevenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$(900,000)$(600,000)Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .600,000400,000a. Assume that the acquisition took place on January 1. What figures would appear in a con- solidated income statement for this year?b. Assume that the acquisition took place on April 1. Sawyer’s revenues and expenses occurred uniformly throughout the year. What amounts would appear in a consolidated income statement for this year?