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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,
2005, consolidating worksheet, how much intercompany profit
should be eliminated from Scroll's inventory?