On May 1, 2016, Taft Company acquires a 80% interest in Marcus Company for $400,000. The fair value of the NCI is $100,000. The following determination and distribution of excess schedule is prepared:

Goodwill, applicable to the parent’s interest ($64,000), will be amortized over 15 years for tax purposes only.
Taft Company and Marcus Company have the following separate income statements for the year ended December 31, 2018:

During 2018, Marcus Company pays cash dividends of $25,000.
Required
Prepare the entry to record income tax payable on each company’s books. Assume a 30% corporate income tax rate.

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Determination and Distribution of Excess Schedule Implied Company Fair Value Parent Price NCI Value 20% 500,000 $400,000 $100,000 Less book value of interest acquired 300,000 100,000 400,000 $400,000 $400,000 80% 20% $80,000 20,000 Book value. $320,000 80,000 Excess of fair value over book value . . . $100,000 Adjustment of identifiable accounts: Amortization per Year Worksheet Life Adjustment $100,000 Goodwill. debit D Taft Marcus Company 440,000 200,000 17,500 Compan $750,000 $570,000 350,000 $310,000 $220,000 140,000 .$110,000 80,000 Sales Less cost of goods sold Income before dividends . .. . $127,500 80,000