What are the journal entries

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Reference no: EM132668853

Question - Here's Tamara Company Balance reported per January 1 2019

Book Value Fair Value

Cash 45.000 45.000

A/R 60.000 60.000

Inventory 120.000 130.000

Building and Equipment 300.000 240.000

Less: Acc. Dep (150.000)

Total Asset 375.000 475.000

A/P 75.000 75.000

Share Capital 100.000

Additional Paid In Capital 30.000

Retained Earnings 170.000

Total Liabilities and Equities 375.000

In January 1, 2019 Ceria Company bought 40% shares of Tamara Company's. Economics life of all tangible assets = 10 years. Both of the company use FIFO method. Tamara Company reported the net income = 40.000 in 2019 and paid dividend = 8.000. Ceria Company uses the equity method for accounting the investment in Tamara Company

What are the journal entries in 2019 if Ceria Company paid 175.000 for the ownership in Tamara Company? Assuming the differences are allocated to goodwill and amortized for 5 years.

Reference no: EM132668853

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