Question 1 On 1 January 2010, Top Company purchased 30% of the 1,080,000 outstanding shares of...

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Question 1 On 1 January 2010, Top Company purchased 30% of the 1,080,000 outstanding shares of Bottom Company for $1,300,000 The fair value of net assets of Bottom at the acquisition date totalled $4,320,000. By 30 June 2010, Bottom Company reported income of $684,000 and distributed cash dividends of $108,000. On July 1, 2010, Top sells 64,800 of the shares they own for $290,000 in cash. Required: 1- What is the amount of goodwill at the acquisition date and how is it treated? Show the equation and all calculations 3. Record the journal entries at 30 June 2010 in the books of the investor Top Company-show calculations 2- Record the journal entry at 1 January 2010 in the books of the investor Top Company Dr Cr 4- What is carrying amount for the investment in Bottom in the books of the investor Top Company on 30 June 2010? Show all calculations DE Dr G 5- Record the journal entry for the sale of the 64,800 shares on 1 July 2010 in the books of the investor Top Company Dr Cr Question 1 On 1 January 2010, Top Company purchased 30% of the 1,080,000 outstanding shares of Bottom Company for $1,300,000 The fair value of net assets of Bottom at the acquisition date totalled $4,320,000. By 30 June 2010, Bottom Company reported income of $684,000 and distributed cash dividends of $108,000. On July 1, 2010, Top sells 64,800 of the shares they own for $290,000 in cash. Required: 1- What is the amount of goodwill at the acquisition date and how is it treated? Show the equation and all calculations 3. Record the journal entries at 30 June 2010 in the books of the investor Top Company-show calculations 2- Record the journal entry at 1 January 2010 in the books of the investor Top Company Dr Cr 4- What is carrying amount for the investment in Bottom in the books of the investor Top Company on 30 June 2010? Show all calculations DE Dr G 5- Record the journal entry for the sale of the 64,800 shares on 1 July 2010 in the books of the investor Top Company Dr Cr

Answer rating: 100% (QA)

To calculate the amount of goodwill at the acquisition date we use the equation Goodwill Purchase Pr... View the full answer