CHAPTER 12, 2

PLEASE READ: This question has four parts (A-D), please answer the FULL question, please TYPE your answer, please LABEL your answer.

On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $158,400 Ship's net assets on the date of acquisition were 700,000 kroner (NKr). On January 1, 20X5, the book and fair values of the Norwegian subsidiary's identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Ship's property, plant, and equipment exceeded its book value by $18,000. The remaining useful life of Ship's equipment at January 1, 20X5, was 10 years. The remainder of the differential was attributable to a patent having an estimated useful life of 5 years. Ship's trial balance on December 31, 20x5, in kroner, follows: Debits Credits NKr 153,000 228,000 297,000 614,000 Cash Accounts Receivable (net) Inventory Property, Plant & Equipment Accumulated Depreciation Accounts Payable Notes Pavable Common Stock Retained Earnings Sales Cost of Goods Sold Operating Expenses De NKr 161,000 108,000 200,000 450,000 250,000 765,000 417,000 120,000 57,000 48,000 preciation Expense Dividends Paid Total NKr1,934,000 NKr1,934,000