ANSWER ALL PROBLEMS RELATED TO THE QUESTION!

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1. On January 1, 2018, Tinker Co. paid $300,000 for 25% of the common stock of Harbor Co. and uses the equity method to account for the investment. During 2018, Harbor reported income of $120,000 and paid dividends of $40,000. Harbor owns a building with a useful life of twenty years, which was undervalued by $80,000 at the time that Tinker bought its shares of Harbor's common stock. Tinker Co. reports goodwill of $40,000 from this transaction, and the book value of all other acquired assets and liabilities approximated their fair values as of the date of acquisition. Required: A. Compute Harbor Co.'s entire book value as of the date of acquisition. Show all work to receive credit. (10 points) Hint: Prepare an allocation schedule of fair value over book value. B. Prepare the journal entry to record the amortization of excess fair value over book value in 2018. Clearly show supporting calculations. (6 points)