Pell Company purchased 90% of the stock of Silk Company on January 1, 2007, for $1,860,000, an amount equal to S60,000 in excess of the book value of equity acquired. All book values were equal to fair values at the time of purchase (i.e., any excess payment relates to subsidiary goodwill). On the date of purchase, Silk Company's retained earnings balance was $200,000.
Pell Company purchased 90% of the stock of Silk Company on January 1, 2007, for $1,860,000, an amount equal to S60,000 in excess of the book value of equity acquired. All book values were equal to fair values at the time of purchase (i.e., any excess payment relates to subsidiary
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