Question

Mill Corporation acquired 100 percent ownership of Roller Company on January 1, 20X8, for $105,000. At that date, the fair value of Roller’s buildings and equipment was $15,000 more than the book value. Buildings and equipment are depreciated on a 5-year basis. Although goodwill is not amortized, Mill’s management concluded at December 31, 20X8, that goodwill involved in its acquisition of Roller shares had been impaired and the correct carrying value was $2,200.

Trial balance data for Mill and Roller on December 31, 20X8, are as follows:

 

		Mill Corporation								Roller Company
Item	Debit				Credit				Debit					Credit
Cash		$	30,500							$	32,000
Accounts Receivable			79,000								23,000
Inventory			99,000								36,000
Land			38,000								26,000
Buildings & Equipment			350,000								169,000
Investment in Roller Co. Stock			105,500
Cost of Goods Sold			131,000								116,000
Wage Expense			34,000								18,000
Depreciation Expense			24,000								9,000
Interest Expense			11,000								6,000
Other Expenses			12,500								7,000
Dividends Declared			38,000								18,700
Accumulated Depreciation						$	143,000							$	23,000
Accounts Payable							25,000								15,000
Wages Payable							16,000								9,000
Notes Payable							134,000								147,700
Common Stock							192,000								51,000
Retained Earnings							157,300								31,000
Sales							266,000								184,000
Income from Subsidiary							19,200
		$	952,500			$	952,500			$	460,700			$	460,700