1. Perform the preliminary calculations to determine goodwill. 2. Prepare an Amortization Schedule for the fair value/book value differences to include the initial amounts determined and amortization expense for 2021 and unamortized balances at 12-31-2021. (Hint: The unamortized excess for the buildings at year end will be $93).

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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Canby Corporation purchased a 40% interest in the
common stock of Brookings Company for $3.600,000 on
January 2, 2021, when the book value of Brooking's net
stockholder's equity was $8,000,000. Brooking's book
values equaled their fair values except for the following
items: (in thousands)
Book
Fair
Difference
Value
Value
Inventories
$500
$600
$100
Land
$100
$350
$250
Buildings - net (15 year remaining
$300
$550
$250
useful life.)
Equipment - net (5 year remaining
useful life.)
$600
$400
-$200
Required:
1. Perform the preliminary calculations to determine
goodwill.
2. Prepare an Amortization Schedule for the fair value/book value differences to
include the initial amounts determined and amortization expense for 2021 and
unamortized balances at 12-31-2021. (Hint: The unamortized excess for the
buildings at year end will be $93).
Transcribed Image Text:Canby Corporation purchased a 40% interest in the common stock of Brookings Company for $3.600,000 on January 2, 2021, when the book value of Brooking's net stockholder's equity was $8,000,000. Brooking's book values equaled their fair values except for the following items: (in thousands) Book Fair Difference Value Value Inventories $500 $600 $100 Land $100 $350 $250 Buildings - net (15 year remaining $300 $550 $250 useful life.) Equipment - net (5 year remaining useful life.) $600 $400 -$200 Required: 1. Perform the preliminary calculations to determine goodwill. 2. Prepare an Amortization Schedule for the fair value/book value differences to include the initial amounts determined and amortization expense for 2021 and unamortized balances at 12-31-2021. (Hint: The unamortized excess for the buildings at year end will be $93).
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