On the Date of Purchase

On January 1, 2019, Parent acquired 100% of the Common Stock of Sub. The shares were acquired for 150 shares of Parent’s Common stock with a market value of $6 per share (Par value $1) plus additional cash of $1,000. The book value of Sub’s net assets on that date was $1,440.

In addition to the assets listed on the balance sheet of Sub, Parent recognizes the following on the date of acquisition:

1. Unrecorded trademark (amortized over 10 years) $ 80
2. Unrecorded patent (amortized over 5 years) 100
3. Increase in the fair value of land 35
4. Increase in the fair value of equipment (remaining life 7 years) 70
5. Increase in the fair value of buildings (remaining life 10 years) 90
6. Total adjustments $370

Answer rating: 100% (QA)

Thank you for providing the acquisition details It appears that on January 1 2019 Parent acquired 10... View the full answer