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Consolidation at date of acquisition (purchase price greater than book value, acquisition journal entries
Assume that the parent company acquires its subsidiary by exchanging 84,000 shares of its $2 par value Common Stock, with a fair value on the acquisition date of $44 per share, for all of the outstanding voting shares of the investee. In its analysis of the investee company, the parent values all of the subsidiary’s assets and liabilities at an amount equaling their book values except for an unrecorded Trademark with a fair value of $240,000, an unrecorded Video Library valued at $600,000, and Patented Technology with a fair value of $125,000. What is the Goodwill?

b. Given the following acquisition-date balance sheets of the parent and the subsidiary, prepare the consolidation entries Ba

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Credit Consolidation Journal Debit Trademark 240000 Video library 600000 Patent technology 125000 Goodwill(balancing figure)

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