Par Inc purchased all of the outstanding common shares of Sub Corp for cash of $68,951 on Jan 1, Year 1. On the date of acquisition, Sub's identifiable net assets had a carrying value of $11,497. The acquisition differential was allocated to the excess of fair value over book value as follows: inventory's fair value was higher by $45,973; Equipment's fair value was lower by $29,871; Trademarks' fair value was higher by $12,640; and Bonds Payable's fair value was higher by $9,193, Equipment, Trademarks, and Bonds Payable each had an amortizable life of ten (10) years. What will be the net consolidated adjustment to reflect the annual amortization of the differences between fair values and carrying values in Year 2?
Par Inc purchased all of the outstanding common shares of Sub Corp for cash of $68,951 on Jan 1, Year 1. On the date of acquisition, Sub's identifiable net assets had a carrying value of $11,497. The acquisition differential was allocated to the excess of fair value over book value as follows: inventory's fair value was higher by $45,973; Equipment's fair value was lower by $29,871; Trademarks' fair value was higher by $12,640; and Bonds Payable's fair value was higher by $9,193, Equipment, Trademarks, and Bonds Payable each had an amortizable life of ten (10) years. What will be the net consolidated adjustment to reflect the annual amortization of the differences between fair values and carrying values in Year 2?
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
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 8MC
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