On January 1, 2013, Pepper Corporation acquired 80 percent of Salt Company's voting common stock...
80.2K
Verified Solution
Link Copied!
Question
Finance
On January 1, 2013, Pepper Corporation acquired 80 percent of Salt Company's voting common stock for $800,000. At the time of the combination, Salt reported common stock outstanding of $500,000 and retained earnings of $175,000, and the fair value of the noncontrolling interest was $200,000. The book value of Salt's net assets approximated market value except for limited-life patents that had a market value of $80,000 more than their book value, equipment had $50,000 more than book value and Inventory had $30,000 more than book value. The patents and equipment had a remaining economic life of 4 years and 5 years, respectively, at the date of the business combination. Salt reported net income of $150,000 and paid dividends of $20,000 during 2013. Salts Accumulated Depreciation at the time of acquisition was $70K and Peppers was 80K. Depreciation Expense in 2013 for Salt was $20K. Prepare the basic elimination entry at December 31, 2013
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
