Exercise 5-4

On January 1, 2015, Porter Company purchased an 80% interest in Salem Company for $264,400. On this date, Salem Company had common stock of $209,800 and retained earnings of $131,100. An examination of Salem Companys balance sheet revealed the following comparisons between book and fair values:

		Book Value		Fair Value
Inventory		$29,400		$35,600
Other current assets		50,700		55,200
Equipment		301,800		351,000
Land		201,700		201,700

(a)

	Your answer is partially correct. Try again.

Determine the amounts that should be allocated to Salem Companys assets on the consolidated financial statements workpaper on January 1, 2015.

RCES Exercise 5-4 On January 1, 2015, Porter Company purchased an 80% interest in Salem Company for $264,400. On this date, Salem Company had common stock of $209,800 and retained earnings of $131,100. An examination of Salem Company's balance sheet revealed the following comparisons between book and fair values: Inventory Other current assets Equipment Book Value $29,400 50,700 301,800 201,700 $35,600 55,200 351,000 201,700 Land (a) tudy, Your answer is partially correct. Try again. Determine the amounts that should be allocated to Salem Company's assets on the consolidated financial statements workpaper on January 1, 2015. Parent Share Non- Controlling Share Entire Value Purchase Price and Implied Value 264,400 66,100 330,500 Less Book Value of Equity Acquired 272,720 66,100 340,900 Difference between Implied and Book Value (8,320) (2,080) (10,400) Inventory (4,960) (1,240) (6,200) Current Assets (3,600) (900) (4,500) Equipment (Net) (39,360) (9,840) 49,200 Balance 56,240 0 Sain 56,240 Increase Noncontrolling Interest to Fair Value of Assets (14,060) Total Allocated Bargain (70,300) 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