Question & Answer: Easton Corporation purchased 100% of the common stock of Hopkins Inc. on January 2, 2017. Hopkins’ balance sheet on January 2, 2017 was as fol…..

Easton Corporation purchased 100% of the common stock of Hopkins Inc. on January 2, 2017. Hopkins’ balance sheet on January 2, 2017 was as follows: Accounts receivable-net $ 250,000 Current liabilities $ 80,000 Inventory 340,000 Long term debt 170,000 Land 140,000 Common stock ($1 par) 50,000 Building-net 120,000 Paid-in capital 450,000 Equipment-net 90,000 Retained earnings 190,000 Total Assets $940,000 Total Liabilities & Equity $940,000 Fair values agree with book values except for inventory, land, and equipment that have fair values of $390,000, $150,000 and $75,000, respectively. Hopkins has unrecorded patent rights valued at $30,000. Required: Prepare a schedule to assign values to Hopkins’ post-acquisition assets and liabilities assuming Easton paid $780,000 cash for the acquisition. Prepare the consolidation entries for a January 2, 2017 consolidated balance sheet.