same as their carrying amounts except for plant assets( net) which were $ 100,000 in excess of the carrying amount. On that date, the fair value of the 20 % non controlling interest in Shaw was appropriately determined to be $ 200,000. For the year ended December 31, 200x, Shaw had net income of $ 190,000 and paid cash dividends totaling $ 125,000. In the January 1, 200x consolidated balance sheet, goodwill should be reported at
Question 4
On December 31, 1988, Saxe Corporation was merged into Poe Corporation. In the business combination, Poe issued 200,000 shares of its $ 10 par common stock, with a market price of $ 18 a share, for all of Saxe ' s common stock. The stockholders ' equity section of each company ' s balance sheet immediately before the combination was: Assume that the merger is accounted for using the acquisition method of accounting. December 31, 1988 additional paid-in capital should be reported at
Question 5
Scroll, Inc., a wholly owned subsidiary of Pirn, Inc., began operations on January 1, 2005. The following information is from the condensed 2005 income statements of Pirn and Scroll: Additional information:
Sales by Pirn to Scroll are made on the same terms as those made to third parties. Equipment purchased by Scroll from Pirn for $ 36,000 on January 1, 2005, is depreciated using the straight-line method over four years. In Pirn ' s December 31,