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Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2022 Miller paid $784,000 in cash to the owners of Taylor to
Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2022 Miller paid $784,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $196,000 both before and after Miller's acquisition. On January 1, 2022, Taylor reported a book value of $768,000 (Common Stock = $384,000; Additional Paid-In Capital = $115,200; Retained Earnings = $268 800). Several of Taylor's buildings that had a remaining life of 20 years were undervalued by a total of $102,500. During the next three years, Taylor reports income and declares dividends as follows: Year Net Income Dividends 2822 $ 50,208 % 13,188 2823 117,986 19,788 2824 131, 3ee 26,388 Required: Determine the appropriate answers for each of the following questions: a. What amount of excess depreciation expense should be recognized in the consclidated financial statements for the initial years following this acquisition? b. If a consclidated balance sheet is prepared as of January 1, 2022, what amount of goodwill should be recognized? . If a consolidation worksheet is prepared as of January 1, 2022, what Entry S and Entry A should be included? d. On the separate financial records of the parent company, what amount of investment income would be reported for 2022 under each of the following accounting methods? + The equity method. The partial equity method
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