Pell company acquires, Pell Company acquires 80% of Demers

Pell company acquires

Assignment Help Financial Accounting

Reference no: EM13958012

Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2010. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Demers earns income and pays dividends as follows:

Assume the partial equity method is applied.
Compute Pell's investment in Demers at December 31, 2010.
Please give detailed calculation.

A.$625,000.

B.$574,400.

C.$548,000.

D.$542,400.

E.$532,000.

Reference no: EM13958012

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