Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Fizer Pharmaceutical paid $80 million on January 2, 2018, for 10 million shares of Carne Cosmetics common stock. The investment represents a 30% interest in

image text in transcribed

Fizer Pharmaceutical paid $80 million on January 2, 2018, for 10 million shares of Carne Cosmetics common stock. The investment represents a 30% interest in the net assets of Carne and gave Fizer the ability to exercise significant influence over Carne's operations. Fizer received dividends of $1 per share on December 21, 2018, and Carne reported net income of $70 million for the year ended December 31, 2018. The fair value of Carne's common stock at December 31, 2018, was $22.50 per share. The book value of Carne's net assets was $200 million. The fair value of Carne's depreciable assets exceeded their book value by $30 million. These assets had an average remaining useful life of nine years. The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill. Required: Complete the table below and prepare the appropriate journal entries related to the investment during 2018. Complete this question by entering your answers in the tabs below. Calculation General Journal Complete the table below. (Enter your answers in millions, (i.e., 10,000,000 should be entered as 10)). ($ in millions) Investee Net Assets Ownership Interest Difference Attributable to: Net Assets Purchased $ 80 Purchase Price Fair Value Carne's assets Book Value Carne's assets % = Years Adjustment Depreciation adjustment: Investment revenue calculation General Journal >

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Corporate Fraud

Authors: Tracy L. Coenen

1st Edition

047019412X, 978-0470194126

More Books

Students also viewed these Accounting questions