Exercise 5-1

On January 1, 2013, Pam Company purchased an 85% interest in Shaw Company for $541,800. On this date, Shaw Company had common stock of $398,100 and retained earnings of $143,700. An examination of Shaw Companys assets and liabilities revealed that their book value was equal to their fair value except for marketable securities and equipment:

		Book Value		Fair Value
Marketable securities		$19,800		$44,600
Equipment (net)		120,200		140,000

(a) Prepare a Computation and Allocation Schedule for the difference between book value of equity acquired and the value implied by the purchase price. (Round answers to 0 decimal places, e.g. 5,125.)

Marketable securities Equipment (net) Book Value Fair Value $19,800 $44,600 120,200 140,000 (a) Prepare a Computation and Allocation Schedule for the difference between book value of equity acquired and the value implied by the purchase price. (Round answers to o decimal places, e Non Parent Controlling Entire Share Share Value V LINK TO TEXT (b) The parts of this question must be completed in order. This part will be available when you complete the part above. Type here to search