Barns Corporation purchased a 10% interest in Delta Company on January 1, 2015, as an available for-sale

Question:

Barns Corporation purchased a 10% interest in Delta Company on January 1, 2015, as an available for-sale investment for a price of $42,000.

On January 1, 2020, Barns Corporation purchased 7,000 additional shares of Delta Company from existing shareholders for $350,000. This purchase raised Barns's interest to 80%. Delta Company had the following balance sheet just prior to Barns's second purchase:

At the time of the second purchase, Barns determined that Delta's equipment was understated by $50,000 and had a 5-year remaining life. All other book values approximated fair values. Any remaining excess was attributed to goodwill.
1. Prepare the value analysis and the determination and distribution of excess schedule for the 2020 purchase.
2. Record the investment made by Barns on January 1, 2020, and any required adjustment of the prior 10% interest.

Balance Sheet
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