Paster Corporation was seeking to expand its customer base, and wanted to acquire a company in...

  

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Paster Corporation was seeking to expand its customer base, and wanted to acquire a company in a market area it had not yet served. Paster detemnined that the Semma Company was already in the market they were pursuing and on January 1, 2013, purchased a 25% interest in Semma to assure access to Semma's customer base. Paster paid $800,000, at a time when the book value of Semma'snet equity was $3,000,000.Semma's book values equaled their fair values except for the following iterms: Book Fair Value $150,000 Value Inventories $200,000 80,000 100,000 200,000 Land Building-net Equipment-net 210,000 260,000 310,000 Required: 1- Prepare a schedule to allocate any excess purchase cost to identifiable assets and goodwill. 2- If Semma reported net income by $600,000 and dividend payment by $120,000. What is the value of investment in Semma that Paster Corporation has to report in its balance sheet as December 31, 2013? Paster Corporation was seeking to expand its customer base, and wanted to acquire a company in a market area it had not yet served. Paster detemnined that the Semma Company was already in the market they were pursuing and on January 1, 2013, purchased a 25% interest in Semma to assure access to Semma's customer base. Paster paid $800,000, at a time when the book value of Semma'snet equity was $3,000,000.Semma's book values equaled their fair values except for the following iterms: Book Fair Value $150,000 Value Inventories $200,000 80,000 100,000 200,000 Land Building-net Equipment-net 210,000 260,000 310,000 Required: 1- Prepare a schedule to allocate any excess purchase cost to identifiable assets and goodwill. 2- If Semma reported net income by $600,000 and dividend payment by $120,000. What is the value of investment in Semma that Paster Corporation has to report in its balance sheet as December 31, 2013?

Answer rating: 100% (QA)

Solution 1 Schedule of acquisition Total Investment 800000 Less Net assets 80000025 200000 I... View the full answer