Question

Pace Company purchased 20,000 of the 25,000 shares of Saddler Corporation for $525,000. On January 3, 2011, the acquisition date, Saddler Corporation’s capital stock and retained earnings account balances were $500,000 and $100,000, respectively.
The following values were determined for Saddler Corporation on the date of purchase:



Required:
A. Prepare the entry on the books of Pace Company to record its investment in Saddler Corporation.
B. Prepare a Computation and Allocation Schedule for the difference between book value and the value implied by the purchase price in the consolidated statementsworkpaper.


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  • CreatedMarch 13, 2015
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