CHAPTER 5 - Allocation, Depreciation and Amortization of the Difference betwn Implied and Book Value EXERCISES 1. On January 1, 2013, Plymouth Corporation purchased an 80% interest in Salem Company for $1,200,000. A summary of Salem's balance sheet on that date revealed the following: Receivables Inventory Equipment Land Book Value $ 200,000 350,000 500,000 245,000 $1.295,000 $ 295,000 500,000 500,000 $1,295,000 Fair Value $ 200,000 370,000 650,000 330,000 $1,550,000 Liabilities Common stock Retained earnings The equipment had an original life of 20 years and has a remaining useful life of 10 years. A. Calculate the difference between implied and book value