Exception of the company inventories

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Reference no: EM133659655

Question: Ahmad Inc. (Ahmad) purchased a controlling interest in David Inc. (David) on January 1, 2022, when David's common shares and retained earnings were carried at $180,000 and $60,000, respectively. On that date, David's book values approximated its fair values, with the exception of the companys inventories and a patent held by David. The patent, which had an estimated remaining useful life of ten years, had a fair value which was $20,000 higher than its book value. David's inventories on January 1, 2022 were estimated to have a fair value that was $16,000 higher than their book value.

Reference no: EM133659655

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