On January 1, 2018, Vacker Co. acquired 70% of Carper Inc. by paying $630,000. Carper...
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Accounting
On January 1, 2018, Vacker Co. acquired 70% of Carper Inc. by paying $630,000. Carper reported common stock on that date of $420,000 with retained earnings of $250,000. Book value equaled fair value for all items on Carpers balance sheet except for the following:
Book Value:
Land - $40,000
Building (10 yr. remaining life) - $120,000
Copyrights (20 yr. remaining life) - $10,000
Fair Value:
Land - $60,000
Building (10 yr. remaining life) - $150,000
Copyrights (20 yr. remaining life) - $80,000
Carper earned net income and paid cash dividends as follows:
Net Income:
2018 - $105,000
2019 - $135,000
2020 - $150,000
Dividends Paid:
2018 - $50,000
2019 - $60,000
2020 - $80,000
Vecker Co. uses the partial equity method to account for its investment in Carper Inc.
Required:
1. Prepare a schedule to determine goodwill, and the amortization and allocation amounts.
2. Prepare the December 31, 2019, consolidating eliminating entries, in general journal form. (Vacker Co. and Subsidiary: Consolidated Worksheet).
Answer & Explanation
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