Homework Answers
| Common stock | $ 233,000 |
| Additional paid in capital | $ 389,000 |
| Retained earnings | $ 223,000 |
| Book value of thompson Company | $ 845,000 |
| Investmented amount (100% share) | $ 1,160,000 |
| Less: Book value of thompson Company | $ 845,000 |
| Excess fair value over book value | $ 315,000 |
| Allocaton of Excess fair value over book value | |
| Undervalued land (193000-75000) | $ 118,000 |
| Undervalued building (276000-250000) | $ 26,000 |
| Less: Overvalued equipment (518000-540000) | $ (22,000) |
| Allocated to goodwill (315000-(118000+26000-22000)) | $ 193,000 |
| Total allocated | $ 315,000 |
| Thompson net income reported | $ 134,000 |
| Less: Depreciationn on Undervalued building (26000/20) | $ (1,300) |
| Add: Depreciationn on Overvalued equipment (22000/10) | $ 2,200 |
| Thompson net income adjusted | $ 134,900 |
| Thompson net income adjusted | $ 134,900 |
| Barber net income | $ 468,000 |
| Consolidated net income | $ 602,900 |
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