Exercise 5-1

On January 1, 2013, Pam Company purchased an 85% interest in Shaw Company for $536,500. On this date, Shaw Company had common stock of $399,300 and retained earnings of $137,200. 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		$19,900		$45,000
Equipment (net)		119,600		140,900

(a)

	Your answer is partially correct. Try again.

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.)

		Parent Share		Non- Controlling Share		Entire Value
		$		$		$
		$		$		$

LINK TO TEXT

Attempts: 2 of 5 used

SAVE FOR LATER

SUBMIT ANSWER

(b) The parts of this question must be completed in order. This part will be available when you complete the part above.

Exercise 5-1 On January 1, 2013, Pam Company purchased an 85% interest in Shaw Company for $536,500. On this date, Shaw Company had common stock of $399,300 and retained earnings of $137,200. An examination of Shaw Company's assets and liabilities revealed that their book value was equal to their fair value except for marketable securities and equipment: Marketable securities Equipment (net) Book Value $19,900 119,600 Fair Value $45,000 140,900 (a) Your answer is partially correct. Try again. 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.g. 5,125.) Parent Share Non- Controlling Share Entire Value T Purchase Price and Implied Value 536500 399300 137200 Less Book Value of Equity Acquired T Common Stock X TRetained Earnings Total Book Value X TDifference Between Implied and Book Value T Marketable Securities X x Equipment x T Balance TGoodwill T Balance LINK TO TEXT Attempts: 2 of 5 used SAVE FOR LATER SUBMIT ANSWER (b) The parts of this question must be completed in order. This part will be available when you complete the part above