Branch Corporation purchased 100 percent of Hardy Company's common stock on January 1, 20X5, and paid $28,000

Question:

Branch purchased 100 percent of Hardy Company's on January 1, 20X5, and paid $28,000 above book value. The full amount of the additional payment was attributed to amortizable assets with a life of eight years remaining at January 1, 20X5. During 20X5 and 20X6, Hardy reported net income of $33,000 and $6,000 and paid dividends of $15,000 and $12,000, respectively. Branch uses the equity method in accounting for its investment in Hardy and reported a balance in its investment account of $161,000 on December 31, 20X6.

Required
Compute the amount paid by Branch to purchase Hardy shares.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...