a | The acquisition date fair value allocation schedule | |||
Total | P company | Sub | ||
Fair value paid for acquisition by P-80% | $750,000 | |||
Fair value of noncontrolling interest | $180,000 | |||
Total fair value | $930,000 | |||
Less: Book value (common stock+Retained Earnings) | $380,000 | $304,000 | $76,000 | |
Excess of fair value over book value | $550,000 | $446,000 | $104,000 | |
Fair value allocation | ||||
Land | $205,000 | $164,000 | $41,000 | |
Building (10 years) | $120,000 | $96,000 | $24,000 | |
Trademark | $100,000 | $80,000 | $20,000 | |
Bonds Payable | ($15,000) | ($12,000) | ($3,000) | |
Goodwill | $140,000 | $118,000 | $22,000 | |
b | Elimination entries as of the acquisition date | |||
Date | Description | Debit | Credit | |
Common Stock | $140,000 | |||
Retained Earnings | $240,000 | |||
Investment in S | 304000 | |||
Non-controlling Interest | 76000 | |||
(To eliminate subsidiary common stock and retained earnings) | ||||
Land | $205,000 | |||
Building (10 years) | $120,000 | |||
Trademark | $100,000 | |||
Goodwill | $140,000 | |||
Bonds Payable | $15,000 | |||
Investment in S | $446,000 | |||
Non-controlling Interest | $104,000 | |||
(To record excess fair value allocation) |
ouléntries that A would make during 2019 to account for its and b. stment in T...
Consolidation at date of acquisition (purchase price equals book value) 59. Consolidation at date of acquisition (purchase price equals book value) A parent company acquires its subsidiary by exchanging 30,000 shares of its Common Stock, with a fair value on the acquisition date of $20 per share, for all of the outstanding voting shares of the investee. a. What is the total fair value of the subsidiary on the acquisition date? b. Prepare the consolidation entry or entries on the...
On January 1, Year 1, Parent purchased 70% of Sub's outstanding stock for $420,000. The non controlling interest's acquisition date fair value is assessed at $174,000. On the acquisition date, reported retained earnings of $180,000. Sub had land which was undervalued on its books by $10,000 and a pa undervalued by $24,000 (5 year life). During Year 1 Sub's net income (earned evenly throughout the year) totaled $96,000 and it declared and paid dividends of $6,000 each quarter. A. Prepare...
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