Chapter 5, Problem 30P

Following are financial statements for Moore Company and Kirby Company for 2018:

		Moore		Kirby
Sales		$ (800,000)		$ (600,000)
Cost of goods sold		500,000		400,000
Operating and interest expenses		100,000		160,000
Net income		$ (200,000)		$ (40,000)
Retained earnings, 1/1/18		$ (990,000)		$ (550,000)
Net income		(200,000)		(40,000)
Dividends declared		1 30,000		–0–
Retained earnings, 12/31/18		$(1,060,000)		$ (590,000)
Cash and receivables	$ 217,000		$ 180,000
Inventory	224,000		160,000
Investment in Kirby	657,000		–0–
Equipment (net)	600,000		420,000
Buildings	1,000,000		650,000
Accumulated depreciation—buildings	(100,000)		(200,000)
Other assets	200,000		100,000
Total assets	$ 2,798,000		$ 1,310,000
Liabilities	$(1,138,000)		$ (570,000)
Common stock	(600,000)		(150,000)
Retained earnings, 12/31/18	(1,060,000)		(590,000)
Total liabilities and equity	$(2,798,000)		$(1,310,000)

• Moore purchased 90 percent of Kirby on January 1, 2017, for $657,000 in cash. On that date, the 10 percent noncontrolling interest was assessed to have a $73,000 fair value. Also at the acquisition date, Kirby held equipment (four-year remaining life) undervalued in its financial records by $20,000 and interest-bearing liabilities (five-year remaining life) overvalued by $40,000. The rest of the excess fair over book value was assigned to previously unrecognized brand names and amortized over a 10-year life.
• During 2017 Kirby reported a net income of $80,000 and declared no dividends.
• Each year Kirby sells Moore inventory at a 20 percent gross profit rate. Intra-entity sales were $145,000 in 2017 and $160,000 in 2018. On January 1, 2018, 30 percent of the 2017 transfers were still on hand, and on December 31, 2018, 40 percent of the 2018 transfers remained.
• Moore sold Kirby a building on January 2, 2017. It had cost Moore $100,000 but had $90,000 in accumulated depreciation at the time of this transfer. The price was $25,000 in cash. At that time, the building had a five-year remaining life.

 Determine all consolidated balances either computationally or by using a worksheet.