On January 1, 2013, Field Company acquired 40% of North Company by purchasing 8,000 shares for $144,000

Question:

On January 1, 2013, Field Company acquired 40% of North Company by purchasing 8,000 shares for $144,000 and obtained significant influence. On the date of acquisition, Field calculated that its share of the excess of the fair value over the book value of North's depreciable assets was $15,000 and that the purchased goodwill was $12,000. At the end of 2013, North reported net income of $45,000 and paid dividends of $0.70 per share. Field depreciates its depreciable assets over a 12-year remaining life.

Required:

1. Prepare all the journal entries of Field to record the preceding information for 2013.

2. Next Level What is the conceptual justification for the use of the equity method?

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Intermediate Accounting Reporting and Analysis

ISBN: 978-1111822361

1st edition

Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach

Question Posted: