Prepare the entry to record original investment in piaffe

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Reference no: EM13215774

On July 1, 2013, Walter Allen Inc. purchased 6,000 shares of the outstanding common stock of Piaffe Corporation at a cost of $140,000. Piaffe had 30,000 shares of outstanding common stock. Assume the total book value and fair value of net assets is $650,000. Both companies have a January through December fiscal year. The following data pertains to Piaffe Corporation during 2013:
Dividends declared and paid, Jan. 1 - June 30 $12,000
Dividends declared and paid, July 1 - Dec. 31 $12,000
Net income, Jan.1 - June 30 $14,000
Net income, July 1 - Dec. 31 $18,000

1. Prepare the entry to record the original investment in Piaffe.
2. Compute any goodwill on the acquisition.
3. Prepare all other entries for 2013 under the equity method.

Reference no: EM13215774

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