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.