On January 1 2012 Palka Inc acquired 70 percent of #8089

On January 1, 2012, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger
Company for $1,141,000 in cash. The price paid was proportionate to Sellinger's total fair value,
although at the acquisition date, Sellinger had a total book value of $1,380,000. All assets
acquired and liabilities assumed had fair values equal to book values except for a patent (six-
year remaining life) that was undervalued on Sellinger's accounting records by $240,000.On
January 1, 2013, Palka acquired an additional 25 percent common stock equity interest in
Sellinger Company for $415,000 in cash. On its internal records, Palka uses the equity method
to account for its shares of Sellinger.During the two years following the acquisition, Sellinger
reported the following net income and dividends:_______________________________2012
____________________2013Net income . . . . . . . . . . . . . . . . . . . $340,000
........................$440,000Dividends . . . . . . . . . . . . . . . . . . . . . 150,000 .........................180,000a.
Show Palka's journal entry to record its January 1, 2013, acquisition of an additional 25 percent
ownership of Sellinger Company shares.b. Prepare a schedule showing Palka's December 31,
2013, equity method balance for its Investment in Sellinger account.View Solution:
On January 1 2012 Palka Inc acquired 70 percent of

ANSWER
http://paperinstant.com/downloads/on-january-1-2012-palka-inc-acquired-70-percent-of/

1/1
Powered by TCPDF (www.tcpdf.org)