Fizer Pharmaceutical paid $86 million on January 2, 2021, for 6 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, 2021, and Carne reported net income of $32 million for the year ended December 31, 2021. The fair value of Carne’s common stock at December 31, 2021, was $36.50 per share.
Fizer Pharmaceutical paid $86 million on January 2, 2021, for 6 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, 2021, and Carne reported net income of $32 million for the year ended December 31, 2021. The fair value of Carne’s common stock at December 31, 2021, was $36.50 per share.
- The book value of Carne's net assets was $184 million.
- The fair value of Carne's
depreciable assets exceeded their book value by $40 million. These assets had an average remaining useful life of ten years. - The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to
goodwill .
Complete the table below. (Enter your answers in millions, (i.e., 10,000,000 should be entered as 10)).
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2. record the investors share of net income
3. record cash dividends
4. record the depreciation adjustment
5. record the fair value adjustment at year end
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