Question
Holly Corporation purchased a 45% interest in the common stock of Ivy Company for $3,500,000 on January 1, 2018, when the book value of Ivy's
Holly Corporation purchased a 45% interest in the common stock of Ivy Company for $3,500,000 on January 1, 2018, when the book value of Ivy's net stockholder's equity was $7,000,000. Ivy's book values equaled their fair values except for the following items:
BookFair
ValueValueDifference
Inventories$450,000$600,000$ 150,000
Land100,000450,000350,000
Building-net400,000200,000(200,000)
Equipment-net350,000400,00050,000
Required:
Calculate the FMV of the assets at the time of purchase and goodwill, then prepare schedule to allocate any excess purchase cost to identifiable assets and goodwill.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started