On January 1, 2020, Payne Corporation purchased a 75% interest in Salmon Company for $585,000. A summary

Question:

On January 1, 2020, 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:

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

Required:

For the December 31, 2020, 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.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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