At the beginning of the current year, Packwild Tours Inc. acquired 60 percent of Snowbird Resorts’ common stock for $63 million in cash and stock. The estimated fair value of the noncontrolling interest was $28 million. At the date of acquisition, Snowbird’s equity accounts consisted of capital stock of $27 million and a retained earnings deficit of $6 million. Snowbird reports its identifiable net assets at amounts approximating fair value, with these exceptions: the land is undervalued by $1.4 million, property ( 20 -year remaining life) is overvalued by $7.0 million, and previously unreported technology with an indefinite life was valued at $14.0 million. For the year following the acquisition, Snowbird reports a net income of $112,000. Impairment testing reveals $280,000 in impairment on the technology but no impairment of other assets. Packwild reports its investment in Snowbird on its own books using the complete equity method.

Note: Enter all zeros with your numerical answers, do not abbreviate your answers in thousands or in millions.

a. Calculate the amount of goodwill originally reported for this acquisition.

$Answer

b. Calculate equity in net income for the current year, reported on Packwild’s books, and the noncontrolling interest in Snowbird’s income, reported on the consolidated income statement.

Note: Use negative signs with answers that reduce net income amounts.

	Total	Equity in NI	Noncontrolling
			Interest in NI
Snowbird’s reported net income	Answer	Answer	Answer
Revaluation write-offs:
Property	Answer	Answer	Answer
Technology	Answer	Answer	Answer
	Answer	Answer	Answer

Answer rating: 100% (QA)

Amount of goodwill 61600000 Calculated as below Fair valu... View the full answer