On January 1, 2021, Morey, Inc., exchanged $176,425 for 25 percent of Amsterdam Corporation. Morey appropriately applied theequity method to this investment. At January 1, the book values of Amsterdam's assets and liabilities approximated their fair valuesOn June 30, 2021, Morey paid $626,500 for an additional 70 percent of Amsterdam, thus increasing its overall ownership to 95percent. The price paid for the 70 percent acquisition was proportionate to Amsterdam's total fair value. At June 30, the carryingamounts of Amsterdam's assets and liabilities approximated their fair values. Any remaining excess fair value was attributed togoodwillAmsterdam reports the following amounts at December 31, 2021 (credit balances shown in parentheses);RevenuesExpensesRetained earnings, January 11Dividends declared, October 1Common stockAmsterdam's revenue and expenses were distributed evenly throughout the year, and no changes in Amsterdam's stock haveoccurreda. Using the acquisition method, calculate the acquisition-date fair value of Amsterdam to be included in Morey's June 30consolidated financial statements.$ (313,000)218,000(275,100)20,000(500,000)b. Using the acquisition method, calculate the revaluation gain (or loss) reported by Morey for its 25 percent investment in Amsterdamon June 30.c. Using the acquisition method, calculate the amount of goodwill recognized by Morey on Its December 31 consolidated balancesheet (assume no impairments have been recognized]d. Using the acquisition method, calculate the noncontrolling interest amount reported by Morey on its June 30 and December 31consolidated balance sheet.abCdAnswer is complete but not entirely correct.Acquisition-date fair valueRevaluation gainGoodwillNoncontrolling interest on June 30Noncontrolling interest on December 31S895,00011.875268 500SSSS80,03580,035

Acquisation Date fair value= Acquisation Date fair value= Acquisation Fair Value = 895000

a. Using the acquisition method, calculate the acquisition-date fair value of Amsterdam to be included in Morey's June 30 consolidated financial statements. b. Using the acquisition method, calculate the revaluation gain (or loss) reported by Morey for its 25 percent investment in Amsterdam on June 30. c. Using the acquisition method, calculate the amount of goodwill recognized by Morey on its December 31 consolidated balance sheet (assume no impairments have been recognized) d. Using the acquisition method, calculate the noncontrolling interest amount reported by Morey on its June 30 and December 31 consolidated balance sheet. Answer is complete but not entirely correct. d a b Revaluation gain Goodwill Acquisition-date fair value Noncontrolling interest on June 30 Noncontrolling interest on December 31 5 895,000 S 11,875 S 268,500 5 5 80,035 C 80,035 C

a. Using the acquisition method, calculate the acquisition-date fair value of Amsterdam to be included in Morey's June 30 consolidated financial statements. b. Using the acquisition method, calculate the revaluation gain (or loss) reported by Morey for its 25 percent investment in Amsterdam on June 30. c. Using the acquisition method, calculate the amount of goodwill recognized by Morey on its December 31 consolidated balance sheet (assume no impairments have been recognized) d. Using the acquisition method, calculate the noncontrolling interest amount reported by Morey on its June 30 and December 31 consolidated balance sheet. Answer is complete but not entirely correct. d a b Revaluation gain Goodwill Acquisition-date fair value Noncontrolling interest on June 30 Noncontrolling interest on December 31 5 895,000 S 11,875 S 268,500 5 5 80,035 C 80,035 C

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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