On January 1, 2013, Pepper Corporation acquired 90 percent of Salt Company's voting common stock for $810,000. At the time of the combination, Salt reported common stock outstanding of $400,000 and retained earnings of $250,000, and the fair value of the noncontrolling interest was $90,000. The book value of Salt's net assets approximated market value except for limited-life patents that had a market value of $100,000 more than their book value, equipment had $20,000 more than book value and Inventory had $30,000 more than book value. The patents and equipment had a remaining economic life of 4 years and 5 years, respectively, at the date of the business combination. The inventory had a 2 month life. Salt reported net income of $150,000 and paid dividends of $20,000 during 2013. Salt’s Accumulated Depreciation at the time of acquisition was $70K and Pepper’s was 80K. Depreciation Expense in 2013 for Salt was $20K. Prepare the "Excess Expense (Amortization Reclassification) Entry at 12/31/2013.
On January 1, 2013, Pepper Corporation acquired 90 percent of Salt Company's voting common stock for $810,000. At the time of the combination, Salt reported common stock outstanding of $400,000 and
Prepare the "Excess Expense (Amortization Reclassification) Entry at 12/31/2013.
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