Fizer Pharmaceutical paid $68 million on January 2, 2018, for 4 million shares of Carne Cosmetics commonstock. The investment represents a 25% interest in the net assets of Carne and gave Fizer the ability to exercisesignificant influence over Carne’s operations. Fizer received dividends of $1 per share on December 21, 2018,and Carne reported net income of $40 million for the year ended December 31, 2018. The fair value of Carne’scommon stock at December 31, 2018, was $18.50 per share.∙ The book value of Carne’s net assets was $192 million.∙ The fair value of Carne’s depreciable assets exceeded their book value by $32 million. These assets had anaverage remaining useful life of eight years.∙ The remainder of the excess of the cost of the investment over the book value of net assets purchased wasattributable to goodwill.Required:Prepare all appropriate journal entries related to the investment during 2018.
Fizer Pharmaceutical paid $68 million on January 2, 2018, for 4 million shares of Carne Cosmetics common
stock. The investment represents a 25% interest in the net assets of Carne and gave Fizer the ability to exercise
significant influence over Carne’s operations. Fizer received dividends of $1 per share on December 21, 2018,
and Carne reported net income of $40 million for the year ended December 31, 2018. The fair value of Carne’s
common stock at December 31, 2018, was $18.50 per share.
∙ The book value of Carne’s net assets was $192 million.
∙ The fair value of Carne’s
average remaining useful life of eight years.
∙ The remainder of the excess of the cost of the investment over the book value of net assets purchased was
attributable to goodwill.
Required:
Prepare all appropriate
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