On January 1, 2025, Payne Corporation purchased a 75% interest in Salmon Company for $585,000. A summary

Question:

On January 1, 2025, Payne Corporation purchased a 75% interest in Salmon Company for $585,000. A summary of Salmon Company’s balance sheet on that date revealed the following:image

The equipment had an original life of 15 years and has a remaining useful life of 10 years.


Required:
For the December 31, 2025, consolidated financial statements workpaper, prepare the workpaper entry to allocate and depreciate the difference between book value and the value implied by the purchase price assuming:
A. Equipment is presented net of accumulated depreciation.
B. Accumulated depreciation is presented on a separate row in the workpaper and in the consolidated statement of financial position.

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Advanced Accounting

ISBN: 9781119794653

8th Edition

Authors: Debra C. Jeter, Paul K. Chaney

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