Petra Corporation paid $500,000 for 80% of the outstanding voting common stock of Sizable Corporation on January
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Question:
Book Fair
Value Value
Inventories (sold in 2011)$80,000$112,000
Buildings-net (15-year life)200,000170,000
Note Payable (paid in 2011)20,00021,250
Sizable reported net income of $75,000 during 2011; dividends of $35,000 were declared and paid during the year.
Required:
1.Prepare a schedule to allocate the fair value/book value differential to the specific identifiable assets and liabilities.
2.Determine Petra's income from Sizable for 2011.
3.Determine the correct balance in the Investment in Sizable account as of December 31, 2011.
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
7th edition
Authors: Hilton Murray, Herauf Darrell
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