Ponon Corporation acquired 75% of the stock of Santo Corporation on January 2, 2020, for $10,000,000 cash
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Question:
Ponon Corporation acquired 75% of the stock of Santo Corporation on January 2, 2020, for $10,000,000 cash and common shares with a par value of $1,000,000 and market value of $20,000,000. The market value of the noncontrolling interest on this date was $8,484,375.
The book value of Santo’s shareholders’ equity was $12,000,000. The differential included the following accounts where book value and fair value differed:
Book Value Fair Value
Land 4,500,000 3,800,000
Plant assets, net (10 year life) 9,000,000 10,000,000
Patents (previously unrecorded – 6 year life) 0 3,000,000
Long-term debt (15 year life) 3,500,000 3,050,000
Required:
2020:
- Prepare an acquisition analysis to determine total goodwill allocated to the parent and NCI.
Related Book For
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III
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