Reference no: EM132774585

Priya Corporation acquired 100 percent of January 1, 2020 Following are Sheldon Company stock on for cash pre-closing trial balance amounts for Priya Corporation and Sheldon Company as of December 31, 2020:

January 1, 2020 $877,000

Investment in sheldon corp 920

Common stock$165,000

Additional paid in capital$309,000

Retained Earnings$246,000

Additional Information:

1. On January 1, 2020 the fair market value of Sheldon's assets equaled their book value with the exception of:

Inventory - was overvalued by $11,000 (all of this inventory was sold during 2020).

Building - was undervalued by $88,000 (remaining useful life was estimated to be 4 years) .

Land - was by undervalued $29,000.

Equipment - was overvalued by $24,000 (remaining useful life was estimated to be 8 years).

The new Goodwill from the acquisition was impaired by $15,000 at year-end.

Problem a. Analyze the Investment in Sheldon account as of the acquisition date.