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BONUS PROBLEM ( 15 POINTS) Vatter Company acquired a 30% interest in the voting stock of Zelda Company for $331,000 on January 1, 2009 when
BONUS PROBLEM ( 15 POINTS) Vatter Company acquired a 30% interest in the voting stock of Zelda Company for $331,000 on January 1, 2009 when Zelda's stockholders equity consisted of capital stock of $ 600,000 and retained earnings of $ 400,000. At the time of Vatter investment, Zelda's assets and liabilities were recorded at their fair values, except for inventories that were undervalued by $ 30,000 and a building with a 10-year remaining useful life that was overvalued by $ 60,000. Zelda has income for 2009 of $ 100,000 and pays dividends of $ 50,000. Required: a) What is the amount if any of Goodwill Vatter is paying? 3 pts b) Compute Vatter's net income from Zelda for 2009 4 pts c) What is the balance of the Vatter's Investment in Zelda account at Decmber 31,2009 4 pts d) What is Vatter's share of Zelda's net assets at December 31, 2009 4 pts
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