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question on january 1 2014 bretz inc acquired 60 of the outstanding shares of keane 4292958

Question

On January 1,2014, Bretz Inc. acquired 60% of the outstanding shares of Keane Company for $573,000 in cash. The price paid was proportionate to Keane's total fair value although at the date of acquisition and liabilities assumed had fair values equal to book values except for a copyright (6-year remaining life) that was undervalued in Keane's accounting records by $120,000. During 2014, Keane reported net income of $150,000 and declared cash dividends of $80,000. On January 1,2015, Bretz bought an additional 30% interest in Keane for $300,000.

The following financial information is for these two companies for 2015. Keane issued no additional capital stock during either 2014 or 2015. Also at year-end, there were no intra entity receivables or payable.

Bretz,INc. Keane Company

Revenues $(402,000) $(300,000)

Operating Expenses $200,000 $120,000

Equity in Keane Earnings $(144,000) 0

Net Income $(346,000) $(180,000)

Retained Earnings 1/1 $(797,000) $(500,000)

Net Income (above) $(346,000) $(180,000)

Dividends declared $143,000 $60,000

Retained earnings 12/31 $(1,000,000) $(620,000)

Current Assets $224,000 $190,000

Investment in Keane Company $994,500 0

Trademarks $106,000 $600,000

CopyRights $210,000 $300,000

Equipment (net) $380,000 $110,000

Total Assets $1,914,500 $1,200,000

Liabilities $(453,000) $(200,000)

Common Stock $(400,000) $(300,000)

Additional Paid in capital $(60,000) $(80,000)

Additional paid in capital-step acquisition $(1,500) 0

Retained Earnings 12/31 $(1,000,000) $(620,000)

A. Show the journal entry Bretz made to record its January 1,2015,acquisition of an additional 30% of Keane Company Shares

B. Prepare a schedule showing how Bretz determined the Investment in Keane Company balance as of December 31,2015

C. Prepare a consolidated worksheet for Bretz Inc and Keane Company for December 31,2015

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