Reference no: EM132891953

Question - On January 1, 2021, Petterson, Inc. purchased 75% of Singer Company for $600,000. At the acquisition date, Singer's total fair market value, including non-controlling interest, was assessed at $800,000.

At the acquisition date, Singer's book value was $700,000.

Several individual items on Singer's January 1, 2021 financial report had fair market values different from book values, as follows:

Equipment - 5 year remaining life BV: 250,000 FMV: 300,000

Patent - 4 years remaining BV: 104,000 FMV: 120,000

Peterson uses the Equity Method to account for investments. At the end of 2021, there were no receivables or payables between the companies.

Required -

1) Prepare Fair Value Allocation as of January 1, 2021.

2) Prepare Consolidated Journal Entries for December 31, 2021.

3) Prepare Consolidated Worksheet for December 31, 2021.