Question

Albuquerque, Inc., acquired 24,000 shares of Marmon Company several years ago for $820,000. At the acquisition date, Marmon reported a book value of $910,000, and Albuquerque assessed the fair value of the noncontrolling interest at $205,000. Any excess of acquisition-date fair value over book value was assigned to broadcast licenses with indefinite lives. Since the acquisition date and until this point, Marmon has issued no additional shares. No impairment has been recognized for the broadcast licenses. At the present time, Marmon reports $1,040,000 as total stockholders’ equity, which is broken down as follows: Common stock ($12 par value) $ 360,000 Additional paid-in capital 450,000 Retained earnings 230,000 Total $ 1,040,000 View the following as independent situations: a. & b. Marmon sells 10,000 and 2,000 shares of previously unissued common stock to the public for $45 and $34 per share. Albuquerque purchased none of this stock. What journal entry should Albuquerque make to recognize the impact of this stock transaction? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations.)

Answer 1

Answer: Given that * Albuquer que in marmon reported intuert acquired a uooo shares of a book value non controlling linenses . It is assigned to broad cast with indefinitive Journal entries. No accounit explaintion cash loooox U5) lo credit slo Debit 450000 account explaintion common stock 110000X12) 120000 Capital in excess per value common. = cash - com stock ..u50000 120000 33 0000]

- b) No account and explaintion Debit cash (2006 x 1954) 108000 108000 Credit account and explaintion NO 24000 common stock ) = 2000 x12 24 000 Parvalue - common stock, in excent of The captial a cash common stock = 10 food -2.4000 84.0ool =