2.8 Measurement Period Adjustment with IncomeEffects
On November 1, 2019, Placer Corporation acquired all of theassets and liabilities of Sonata Company. The acquisition generatedgoodwill of $50,000,000. At the date of acquisition, Sonata’sequipment had an estimated fair value of $27,000,000, and a 4-yearlife, straight-line. On March 31, 2020, new information revealsthat the equipment’s fair value was $36,000,000 at the date ofacquisition. Placer’s accounting year ends on December 31.
Required:
Prepare the journal entry or entries to record the change invaluation of Sonata’s equipment on March 31, 2020, assuming thevaluation change is within the measurement period, and depreciationhas already been recorded through March 31. (Show any calculationsmade)
