Solved: On January 1 2016 Parflex Corporation exchanged

344 000 cash for

On January 1, 2016, Parflex Corporation exchanged $344,000 cash for 90 percent of Eagle
Corporation's outstanding voting stock. Eagle's acquisition date balance sheet follows:

On January 1, 2016, Parflex prepared the following fair-value allocation schedule:

Consideration transferred by Parflex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $344,000

10% non-controlling interest fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,000

Fair value of Eagle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380,000

Book value of Eagle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .324,000

Excess fair over book value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56,000

To equipment (undervalued, remaining life of 9 years) . . . . . . . . . . . . . . . . . . . . . . . 18,000

To goodwill (indefinite life) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 38,000

The companies' financial statements for the year ending December 31, 2018, follow:

At year-end, there were no intra-entity receivables or payables.

a. Compute the goodwill allocation to the controlling and non-controlling interest.

b. Show how Parflex determined its "Investment in Eagle" account balance.

c. Determine the amounts that should appear on Parflex's December 31, 2018, consolidated
statement of financial position and its 2018 consolidated income statement?

On January 1 2016 Parflex Corporation exchanged 344 000 cash for

ANSWER

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