Determination and Distribution of Excess Schedule Company Implied Fair Value NCI Value Parent Price (80%) (20%) Fair value of subsidiary .. $1,335,000 $1,100,000 $235,000 Less book value of interest acquired: Common stock.. $ 100,000 Paid-in capital in excess of par Retained earnings 150,000 350,000 $ 600,000 Total equity. Interest acquired Book value.. $ 600,000 $600,000 80% 20% $ 480,000 $ 620,000 $120,000 Excess of fair value over book value $ 735,000 $115,000 Adjustment of identifiable accounts: Amortization Worksheet Adjustment per Year Life Key 2$ 15,000 50,000 250,000 Inventory 6,250 Investments Land. Buildings Equipment. Patent. 20 172,500 22,500 20,000 12,500 186,250 10 Trademark. 10 Discount on bonds payable. 5 Goodwill. Total $ 735,000
Determination and Distribution of Excess Schedule Company Implied Fair Value NCI Value Parent Price (80%) (20%) Fair value of subsidiary .. $1,335,000 $1,100,000 $235,000 Less book value of interest acquired: Common stock.. $ 100,000 Paid-in capital in excess of par Retained earnings 150,000 350,000 $ 600,000 Total equity. Interest acquired Book value.. $ 600,000 $600,000 80% 20% $ 480,000 $ 620,000 $120,000 Excess of fair value over book value $ 735,000 $115,000 Adjustment of identifiable accounts: Amortization Worksheet Adjustment per Year Life Key 2$ 15,000 50,000 250,000 Inventory 6,250 Investments Land. Buildings Equipment. Patent. 20 172,500 22,500 20,000 12,500 186,250 10 Trademark. 10 Discount on bonds payable. 5 Goodwill. Total $ 735,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Whitney Company acquires an 80% interest inMasters Company common stock on January 1, 2015. Appraisals of Masters’ assets and liabilities are performed, and Whitney ends up paying an amount that is greater than the fair value of Masters’ net assets and reflects a premium to achieve control. The fair value of the NCI is $235,000. The following partial determination and distribution of excess schedule is created on January 1, 2015, to assist in putting together the consolidated financial statements:
Prepare amortization schedules for the years 2015, 2016, 2017, and 2018.
Transcribed Image Text:Determination and Distribution of Excess Schedule
Company
Implied Fair
Value
NCI
Value
Parent
Price
(80%)
(20%)
Fair value of subsidiary ..
$1,335,000
$1,100,000
$235,000
Less book value of interest acquired:
Common stock..
$ 100,000
Paid-in capital in excess of par
Retained earnings
150,000
350,000
$ 600,000
Total equity.
Interest acquired
Book value..
$ 600,000
$600,000
80%
20%
$ 480,000
$ 620,000
$120,000
Excess of fair value over book value
$ 735,000
$115,000
Adjustment of identifiable accounts:
Amortization
Worksheet
Adjustment
per Year
Life
Key
2$
15,000
50,000
250,000
Inventory
6,250
Investments
Land.
Buildings
Equipment.
Patent.
20
172,500
22,500
20,000
12,500
186,250
10
Trademark.
10
Discount on bonds payable.
5
Goodwill.
Total
$ 735,000
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