|On January 1, 2011, Porter Company purchased
an 90% interest in the capital stock of Salem Company for $850,000.
fair value of the noncontrolling interest was proportionate to the
consideration paid by the controlling interest.
that time, Salem Company had capital stock of $550,000 and retained earnings
between the fair value and the book value of the identifiable assets of Salem
Company were as follows:
|Under (Over) Valued|
Research & Development
book values of all other assets and liabilities of Salem Company were equal
to their fair values on January 1, 20011
inventory was sold in 2011 and the equipment has a 5-year remaining life as
of January 1, 2011.
bonds payable mature in 5 years from January 1, 2011
12/31/13, Salem owes Porter $25000
for the year ended December 31, 2013:
Prepare the analysis as of acquisition date including unamortized
differential at 1/1/11.
Prepare the journal entries Porter recorded with respect to its investment in
Porter for the year ended 12/31/13.
formulas in all calculations.
label each part in the spreadsheet tab below
|Do problem on “Additional Question” below for
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