Reference no: EM132824636
Problem 1: How do prepare a fair value allocation schedule for January 1, 2021 using the equity method?
On January 1, 2021, Peterson purchased 75% of singer company for $600000. At the acquisition date, singers total fair market value, including non controlling interest, was assessed $800000. At the acquisition date, singer's book value was $700000.
Several individual items on Singer's January 01, 2021 financial report had fair market values different from book values, as follows:
Equipment 5 year remaining life
Book value 250000
Fair market value 300000.
Patent four year remaining life book value on 104000, fair market value 120000. Peterson uses equity method to account for investments. At the end of 2021, there were no receivables or payables between the companies.