e except for inventory and plant facilities. The fair value exceeded book value by $5 million for the inventory and by $30 million for the plant facilities.
Northwest Paperboard Company, a paper and allied products manufacturer, was seeking to gain a foothold in Canada. Toward that end, the company bought 40% of the outstanding common shares of Vancouver Timber and Milling, Inc., on January 2, 2021, for $540 million.
At the date of purchase, the book value of Vancouver's net assets was $845 million. The book values and fair values for all
The estimated useful life of the plant facilities is 15 years. All inventory acquired was sold during 2021.
Vancouver reported net income of $160 million for the year ended December 31, 2021. Vancouver paid a cash dividend of $50 million.
Required:
1. Prepare all appropriate
2. What amount should Northwest report as its income from its investment in Vancouver for the year ended December 31, 2021?
3. What amount should Northwest report in its balance sheet as its investment in Vancouver?
4. What should Northwest report in its statement of
The journal entries are given as,
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