On January 1, 2020, Barber Corp. paid $1,160,000 to acquire Thompson Co. Thompson maintained separate incorporation. Barber used the equity method to account for the investment. The following information is available for Thompson’s assets, liabilities, and stockholders' equity accounts on January 1, 2020: Book Value Fair Value Current assets $ 130,000 $ 130,000 Land 75,000 193,000 Building (twenty year life) 250,000 276,000 Equipment (ten year life) 540,000 518,000 Current liabilities 26,000 26,000 Long-term liabilities 124,000 124,000 Common stock 233,000 Additional paid-in capital 389,000 Retained earnings 223,000 Thompson earned net income for 2020 of $134,000 and paid dividends of $51,000 during the year. The 2020 total excess amortization of fair-value allocations is calculated to be?
On January 1, 2020, Barber Corp. paid $1,160,000 to acquire Thompson Co. Thompson maintained separate incorporation. Barber used the equity method to account for the investment. The following information is available for Thompson’s assets, liabilities, and stockholders' equity accounts on January 1, 2020: Book Value Fair Value Current assets $ 130,000 $ 130,000 Land 75,000 193,000 Building (twenty year life) 250,000 276,000 Equipment (ten year life) 540,000 518,000 Current liabilities 26,000 26,000 Long-term liabilities 124,000 124,000 Common stock 233,000 Additional paid-in capital 389,000 Retained earnings 223,000 Thompson earned net income for 2020 of $134,000 and paid dividends of $51,000 during the year. The 2020 total excess amortization of fair-value allocations is calculated to be?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2020, Barber Corp. paid $1,160,000 to acquire Thompson Co. Thompson maintained separate incorporation. Barber used the equity method to account for the investment. The following information is available for Thompson’s assets, liabilities, and
| Book Value |
Fair Value |
|||||
| Current assets | $ | 130,000 | $ | 130,000 | ||
| Land | 75,000 | 193,000 | ||||
| Building (twenty year life) | 250,000 | 276,000 | ||||
| Equipment (ten year life) | 540,000 | 518,000 | ||||
| Current liabilities | 26,000 | 26,000 | ||||
| Long-term liabilities | 124,000 | 124,000 | ||||
| Common stock | 233,000 | |||||
| Additional paid-in capital | 389,000 | |||||
| 223,000 | ||||||
Thompson earned net income for 2020 of $134,000 and paid dividends of $51,000 during the year.
The 2020 total excess amortization of fair-value allocations is calculated to be?
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