On 3 January 20X4, Windsor Company purchased 20% of the shares of Brampton for $572,000 cash. Windsor will use the equity method. On this date, Brampton has $1,870,000 of assets, $1,496,000 of liabilities, and $374,000 of equity. Book values reflect fair values except for $840,000 of equipment, which has a five-year life and a fair value of $1,050,000. In 20X4, Brampton pays $28,200 of total dividends and reports earnings of $94,000. Required: 1. Calculate goodwill on acquisition, and the annual extra depreciation on investee equipment at fair value. Goodwill Additional depreciation View transaction list 2. Prepare 20X4 journal entries for Windsor Company. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1 $ $ Journal entry worksheet 497,200 42,000 2 Transaction Record the investment made in Brampton Corp. Note: Enter debits before credits. General Journal Debit Credit >

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 18E
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On 3 January 20X4, Windsor Company purchased 20% of the shares of Brampton for $572,000 cash. Windsor will use the equity
method. On this date, Brampton has $1,870,000 of assets, $1,496,000 of liabilities, and $374,000 of equity. Book values reflect fair
values except for $840,000 of equipment, which has a five-year life and a fair value of $1,050,000. In 20X4, Brampton pays $28,200
of total dividends and reports earnings of $94,000.
Required:
1. Calculate goodwill on acquisition, and the annual extra depreciation on investee equipment at fair value.
Goodwill
Additional depreciation
2. Prepare 20X4 journal entries for Windsor Company. (If no entry is required for a transaction/event, select "No journal entry
required" in the first account field.)
View transaction list
Journal entry worksheet
1
$ 497,200
$
42,000
2
Record the investment made in Brampton Corp.
Transaction
Note: Enter debits before credits.
General Journal
Debit
Credit
>
Transcribed Image Text:On 3 January 20X4, Windsor Company purchased 20% of the shares of Brampton for $572,000 cash. Windsor will use the equity method. On this date, Brampton has $1,870,000 of assets, $1,496,000 of liabilities, and $374,000 of equity. Book values reflect fair values except for $840,000 of equipment, which has a five-year life and a fair value of $1,050,000. In 20X4, Brampton pays $28,200 of total dividends and reports earnings of $94,000. Required: 1. Calculate goodwill on acquisition, and the annual extra depreciation on investee equipment at fair value. Goodwill Additional depreciation 2. Prepare 20X4 journal entries for Windsor Company. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 $ 497,200 $ 42,000 2 Record the investment made in Brampton Corp. Transaction Note: Enter debits before credits. General Journal Debit Credit >
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