Reference no: EM132743918
Question: On January 1, 2019 Vacker Co. acquired 70% of Carper Inc. by paying $650,000. On this date, the NCI fair value was $162,000. Carper reported common stock on the date of $420,000 with retained earning of $252,000. A building was undervalued in the company's financial records by $28,000. This building had a ten-year remain life. Copyrights of $80,000 were to be recognized and amortized over 20 years.
Carper earned income and paid cash dividends as follows:
Year Net Income Dividends Paid
2018 $105,000 $54,600
2019 134,400 61,600
2020 154,000 84,000
On December 31, 2020, Vacker owed $30,800 to Carper. There have been no changes in Carper's common stock account since the acquisition.
1. Show the computation of Excess, allocation of Excess and amortization on Excess.
2. If the equity method had been applied by Vacker for this acquisition, please make following consolidation entries needed as of December 31, 2020?
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: On January 1, 2019 Vacker Co. acquired 70% of Carper Inc. by paying $650,000. On this date, the NCI fair value was $162,000. Carper reported common stock.
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