Determination and Distribution of Excess Schedule Parent NCI Company Implied Fair Value Price Value (80%) (20%) Fair value of subsidiary . $1,062,500 $850,000 $212,500 Less book value of interest acquired: Total equity. . $ 600,000 $600,000 $600,000 Interest acquired 80% 20% Book value.... $480,000 $120,000 Excess of fair value over book value $ 462,500 $370,000 $ 92,500 Adjustment of identifiable accounts: Amortization Worksheet Adjustment per Year Life Key Buildings $ 200,000 $ 10,000 20 debit D1 Goodwill. 262,500 debit D2 Total $ 462,500
Albers Company acquires an 80% interest in Barker Company on January 1, 2015, for $850,000. The following determination and distribution of excess schedule is prepared at the time of purchase:
Albers uses the simple equity method for its investment in Barker. As of December 31, 2019, Barker has earned $200,000 since it was purchased by Albers. Barker pays no dividends during 2015–2019.
On December 31, 2019, the following values are available:
Fair value of Barker’s identifiable net assets (100%) . . . . . . . . . . . . $ 900,000
Estimated fair value of Barker Company (net of liabilities) . . . . . . 1,000,000
Determine if
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