Assume an investor company purchases all of the stock of the investee company in a stock purchase for $900 on 1/1/2022. The investee’s balance sheet on the date of purchase is as follows: Accounts receivable $75 Mortgage payable $75 Inventories $150 Building $600 Stockholders’ equity $750 Total assets $825
Assume an investor company purchases all of the stock of the investee company in a stock purchase for $900 on 1/1/2022. The investee’s
|
|
$75 |
Mortgage payable |
$75 |
|
Inventories |
$150 |
Building |
$600 |
|
|
$750 |
Total assets |
$825 |
|
Total liabilities and equity |
$825 |
|
|
Assume the additional purchase price relates to the b uilding value not reported on investee company’s balance sheet. The building held by the investee has a remaining useful life of 10 years on the acquisition date and
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