Par Inc purchased all of the outstanding common shares of Sub Corp for cash of $68,951 on Jan 1, Year 1. On the date of acquisition, Sub's identifiable net assets had a carrying value of $11,497. The acquisition differential was allocated to the excess of fair value over book value as follows: inventory's fair value was higher by $45,973; Equipment's fair value was lower by $29,871; Trademarks' fair value was higher by $12,640; and Bonds Payable's fair value was higher by $9,193, Equipment, Trademarks, and Bonds Payable each had an amortizable life of ten (10) years. What will be the net consolidated adjustment to reflect the annual amortization of the differences between fair values and carrying values in Year 2?
Par Inc purchased all of the outstanding common shares of Sub Corp for cash of $68,951 on Jan 1, Year 1. On the date of acquisition, Sub's identifiable net assets had a carrying value of $11,497. The acquisition differential was allocated to the excess of fair value over book value as follows: inventory's fair value was higher by $45,973; Equipment's fair value was lower by $29,871; Trademarks' fair value was higher by $12,640; and Bonds Payable's fair value was higher by $9,193, Equipment, Trademarks, and Bonds Payable each had an amortizable life of ten (10) years. What will be the net consolidated adjustment to reflect the annual amortization of the differences between fair values and carrying values in Year 2?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Par Inc purchased all of the outstanding common shares of Sub Corp for cash of $68,951 on Jan 1, Year 1. On the date of
acquisition, Sub's identifiable net assets had a carrying value of $11,497. The acquisition differential was allocated to the excess
of fair value over book value as follows: inventory's fair value was higher by $45,973; Equipment's fair value was lower by $29,871;
Trademarks' fair value was higher by $12,640; and Bonds Payable's fair value was higher by $9,193. Equipment, Trademarks, and
Bonds Payable each had an amortizable life of ten (10) years. What will be the net consolidated adjustment to reflect the annual
amortization of the differences between fair values and carrying values in Year 2?
O a. -$2,775
O b. -$2,576
O . -$2,642
O d. -$2,708
O e. -$2,510
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