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  • On January 1 2011 Parflex Corporation Exchanged 344 000 Cash For

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    Miroslav Gegoski
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    Parflex Corporation acquired 90% of Eagle Corporation on January 1, 2011 by exchanging $344,000 cash. Parflex allocated the $380,000 fair value of Eagle as follows: $18,000 to equipment and $38,000 to goodwill. Parflex's consolidated financial statements for 2013 should include its investment in Eagle, the amounts on Eagle's statement of financial position, and the combined income of both companies.

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    On January 1 2011 Parflex Corporation Exchanged 344 000 Cash For

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    Parflex Corporation acquired 90% of Eagle Corporation on January 1, 2011 by exchanging $344,000 cash. Parflex allocated the $380,000 fair value of Eagle as follows: $18,000 to equipment and $38,000 to goodwill. Parflex's consolidated financial statements for 2013 should include its investment in Eagle, the amounts on Eagle's statement of financial position, and the combined income of both companies.

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    20 views1 page

    On January 1 2011 Parflex Corporation Exchanged 344 000 Cash For

    Uploaded by

    Miroslav Gegoski
    Parflex Corporation acquired 90% of Eagle Corporation on January 1, 2011 by exchanging $344,000 cash. Parflex allocated the $380,000 fair value of Eagle as follows: $18,000 to equipment and $38,000 to goodwill. Parflex's consolidated financial statements for 2013 should include its investment in Eagle, the amounts on Eagle's statement of financial position, and the combined income of both companies.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    On January 1 2011 Parflex Corporation exchanged 344 000

    cash for #8090


    On January 1, 2011, Parflex Corporation exchanged $344,000 cash for 90% of Eagle
    Corporation's outstanding voting stock. Eagle's acquisition date balance sheet follows:On
    January 1, 2011, Parflex prepared the following fair-value allocation schedule:Consideration
    transferred by Parflex . . . . . . . . . . . . . . . . . . . $344,00010% noncontrolling interest fair value . .
    . . . . . . . . . . . . . . . . 36,000Fair value of Eagle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
    380,000Book value of Eagle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324,000Excess fair over
    book value . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,000to equipment (undervalued, remaining life
    of 9 years) . . . . . . . 18,000to goodwill (indefinite life) . . . . . . . . . . . . . . . . . . . . . . . . . . .
    $38,000The companies' financial statements for the year ending December 31, 2013, follow:a.
    Compute the goodwill allocation to the controlling and noncontrolling interest.b. Show how
    Parflex determined its "Investment in Eagle" account balance.c. Determine the amounts that
    should appear on Parflex's December 31, 2013, consolidated statement of financial position and
    its 2013 consolidated income statement.View Solution:
    On January 1 2011 Parflex Corporation exchanged 344 000 cash for

    ANSWER
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