On 3 January 20X4, Windsor Company purchased 20% of the shares of Brampton for $572,000 cash. Windsor will use the equity method. On this date, Brampton has $1,870,000 of assets, $1,496,000 of liabilities, and $374,000 of equity. Book values reflect fair values except for $840,000 of equipment, which has a five-year life and a fair value of $1,050,000. In 20X4, Brampton pays $28,200 of total dividends and reports earnings of $94,000. Required: 1. Calculate goodwill on acquisition, and the annual extra depreciation on investee equipment at fair value. Goodwill Additional depreciation View transaction list 2. Prepare 20X4 journal entries for Windsor Company. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1 $ $ Journal entry worksheet 497,200 42,000 2 Transaction Record the investment made in Brampton Corp. Note: Enter debits before credits. General Journal Debit Credit >

On 3 January 20X4, Windsor Company purchased 20% of the shares of Brampton for $572,000 cash. Windsor will use the equity method. On this date, Brampton has $1,870,000 of assets, $1,496,000 of liabilities, and $374,000 of equity. Book values reflect fair values except for $840,000 of equipment, which has a five-year life and a fair value of $1,050,000. In 20X4, Brampton pays $28,200 of total dividends and reports earnings of $94,000. Required: 1. Calculate goodwill on acquisition, and the annual extra depreciation on investee equipment at fair value. Goodwill Additional depreciation View transaction list 2. Prepare 20X4 journal entries for Windsor Company. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1 $ $ Journal entry worksheet 497,200 42,000 2 Transaction Record the investment made in Brampton Corp. Note: Enter debits before credits. General Journal Debit Credit >

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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