What is the goodwill for the problem. This is what I have and it is not correct. EQUITY METHOD PARLEZ COMPANY 95% ACQUISITON $ 541,500 SAYS COMPANY 5% FAIR VALUE $ 28,500 TOTAL FAIR VALUE OF ACQUISITON $ 570,000 SAYS COMPANY ANALYSISITEMBOOK VALUEFAIR VALUEAMOUNT LEFT TO BE DEPRECIATEYEARSDEPRECIATION CURRENT ASSETS 170,000 170,000 EQUIPMENT 160,000 172,000 12,0006 2,000LAND 110,000 146,000 36,000 BUILDINGS 250,000 286,000 36,00012 3,000LIABILITIES (300,000) (300,000) GOODWILL - 96,000 96,000 TOTAL: 390,000 570,000 180,000 5,000 Parlez Company acquired95%of the common stock of Says Company January 1, year one, forThe consideration given was proportional to Says' fair value.$570,000On that date, Says had the following trial balance:debitaccountcredit$100,000Additional paid in capitalBuilding (12-year life) $250,000Common stock170,000Current assets170,000160,000110,000Equipment (6-yr life)LandLiabilities (due in 4 years)300,000Retained eamings 1/year 1120,000Totals$690,000 $690,000$70,000$30,000During year one, Says reported net income ofDuring year one, Says paid dividends of$80,000$40,000During year two, Says reported net income ofDuring year two, Says paid dividends ofOn January 1, year one, fair values were:$146,000$286,000$172,000LandBuildingEquipmentThere was no impairment of any goodwill arising from the acquisition.Please indicate clearly which method you choose for Parlez to use toaccount for its acquisition of Says Company.Problem 4. Use the data for the Parlez Company acquisition of the SaysCompany to prepare the consolidation worksheet entriesfor December 31 of year one. For clarity, use theentry labels like S, A, I and so on.

Equity Method - Under this method investment in another company recorded at historical cost and…

Answered: Parlez Company acquired 95% of the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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What is the goodwill for the problem. This is what I have and it is not correct.

EQUITY METHOD
PARLEZ COMPANY 95% ACQUISITON		$ 541,500
SAYS COMPANY 5% FAIR VALUE		$ 28,500
TOTAL FAIR VALUE OF ACQUISITON		$ 570,000

SAYS COMPANY ANALYSIS
ITEM	BOOK VALUE	FAIR VALUE	AMOUNT LEFT TO BE DEPRECIATE	YEARS	DEPRECIATION
CURRENT ASSETS	170,000	170,000
EQUIPMENT	160,000	172,000	12,000	6	2,000
LAND	110,000	146,000	36,000
BUILDINGS	250,000	286,000	36,000	12	3,000
LIABILITIES	(300,000)	(300,000)
GOODWILL	-	96,000	96,000
TOTAL:	390,000	570,000	180,000		5,000

Parlez Company acquired
95%
of the common stock of Says Company January 1, year one, for
The consideration given was proportional to Says' fair value.
$570,000
On that date, Says had the following trial balance:
debit
account
credit
$100,000
Additional paid in capital
Building (12-year life) $250,000
Common stock
170,000
Current assets
170,000
160,000
110,000
Equipment (6-yr life)
Land
Liabilities (due in 4 years)
300,000
Retained eamings 1/year 1
120,000
Totals
$690,000 $690,000
$70,000
$30,000
During year one, Says reported net income of
During year one, Says paid dividends of
$80,000
$40,000
During year two, Says reported net income of
During year two, Says paid dividends of
On January 1, year one, fair values were:
$146,000
$286,000
$172,000
Land
Building
Equipment
There was no impairment of any goodwill arising from the acquisition.
Please indicate clearly which method you choose for Parlez to use to
account for its acquisition of Says Company.
Problem 4. Use the data for the Parlez Company acquisition of the Says
Company to prepare the consolidation worksheet entries
for December 31 of year one. For clarity, use the
entry labels like S, A, I and so on.

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