On January 1, 2007 the Field Company acquired 40% of the North Company by purchasing 8,000 shares

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On January 1, 2007 the Field Company acquired 40% of the North Company by purchasing 8,000 shares for $144,000 and obtained significant influence. On the date of acquisition, Field calculated that its share of the excess of the fair value over the book value of North’s depreciable assets was $15,000, and that the purchased goodwill was $12,000. At the end of 2007, North reported net income of $45,000 and paid dividends of $0.70 per share. Field Company depreciates its depreciable assets over a 12-year remaining life.


Required

Prepare all the journal entries of Field Company to record the preceding information for 2007.


Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...
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Intermediate Accounting

ISBN: 978-0324300987

10th Edition

Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones

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