Chapter 1 – Problem 15
A)
Account Amount
Acquisition Price 2,700,000
Book value acquired 1,035,000
Excess payment 1,665,000
Excess fair value: computing equipment 140,000
Excess fair value: patented technology 780,000
Excess fair value: trademark 370,000
Goodwill 375,000
Amortization
Computing equipment 20,000
Patented technology 260,000
Annual amortization 280,000
B)
Account Amount
Basic equity accrual of 2017 360,000
Amortization (280,000)
Equity earnings of Sauk Trail 2017 80,000
Basic equity accrual 2018 397,000
Amortization (280,000)
Equity earnings of Sauk Trail 2018 117,000
C)
Account Amount
Acquisition price 2,700,000
Equity earnings of Sauk Trail 2017 80,000
Dividends of 2017 (30,000)
Investment in Sauk Trail Dec. 31, 2017 2,750,000
Investment in Sauk Trail 2,750,000
Equity earnings of Sauk Trail 2018 117,000
Dividends of 2017 (32,000)
Investment in Sauk Trail Dec. 31, 2018 2,835,000
