Vikram bhai On January 1, 2024, Morey, Incorporated, exchanged $178,950 for 25 percent of Amsterdam Corporation. Morey appropriately appliedthe equity method to this investment. At January 1, the book values of Amsterdam's assets and liabilities approximated their fair values.On June 30, 2024, Morey paid $577,500 for an additional 70 percent of Amsterdam, thus increasing its overall ownership to 95percent. The price paid for the 70 percent acquisition was proportionate to Amsterdam's total fair value. At June 30, the carryingamounts of Amsterdam's assets and liabilities approximated their fair values. Any remaining excess fair value was attributed togoodwill.Amsterdam reports the following amounts at December 31, 2024 (credit balances shown in parentheses):RevenuesExpensesRetained earnings, January 1Dividends declared, October 1Common stockAmsterdam's revenue and expenses were distributed evenly throughout the year, and no changes in Amsterdam's stock haveoccurred.Required:Using the acquisition method, compute the following:a. The acquisition-date fair value of Amsterdam to be included in Morey's June 30 consolidated financial statements.b. The revaluation gain (or loss) reported by Morey for its 25 percent investment in Amsterdam on June 30.c. The amount of goodwill recognized by Morey on its December 31 balance sheet (assume no impairments have been recognized).d. The noncontrolling interest amount reported by Morey on its June 30 and December 31 consolidated balance sheet.a.b.$ (274,000)180,000(207,800)10,000(500,000)C.d.d.Acquisition-date fair valueRevaluation gainGoodwillNoncontrolling interest on June 30Noncontrolling interest on December 31$825,000

The acquisition method is commonly used when one organization buys another company. In this method,…

Required: Using the acquisition method, compute the following: a. The acquisition-date fair value of Amsterdam to be included in Morey's June 30 consolidated financial statements. b. The revaluation gain (or loss) reported by Morey for its 25 percent investment in Amsterdam on June 30. c. The amount of goodwill recognized by Morey on its December 31 balance sheet (assume no impairments have been recognized). d. The noncontrolling interest amount reported by Morey on its June 30 and December 31 consolidated balance sheet.

Required: Using the acquisition method, compute the following: a. The acquisition-date fair value of Amsterdam to be included in Morey's June 30 consolidated financial statements. b. The revaluation gain (or loss) reported by Morey for its 25 percent investment in Amsterdam on June 30. c. The amount of goodwill recognized by Morey on its December 31 balance sheet (assume no impairments have been recognized). d. The noncontrolling interest amount reported by Morey on its June 30 and December 31 consolidated balance sheet.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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