On January 1, 2005, Petrel, Inc. purchased 70% of the outstanding voting common stock of Ocean, Inc.,

Fantastic news! We've Found the answer you've been seeking!

Question:

On January 1, 2005, Petrel, Inc. purchased 70% of the outstanding voting common stock of Ocean, Inc., for $2,600,000. The book value of Ocean’s net equity on that date was $3,100,000. Book values were equal to fair values except as follows:

	Book	Fair
Assets & Liabilities	Values	Values	Difference
Equipment	$250,000	$190,000	($60,000)
Building	600,000	700,000	100,000
Notes Payables	270,000	240,000	(30,000)

	$1,120,000	$1,130,000	$10,000