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On December 31, Year 5, Darrell Inc. purchased 100% of the outstanding shares of KIndersley Company for $7,675 cash. Three different values for KIndersley's balance
On December 31, Year 5, Darrell Inc. purchased 100% of the outstanding shares of KIndersley Company for $7,675 cash. Three different values for KIndersley's balance sheet accounts on the date of acquisition were as follows: All dlfferences between carrylng amount and the tax base are temporary dlfferences for the Items IIsted above. The patent has an estimated useful life of 8 years. Any goodwill reported on the consolidated balance sheet pertains only to KIndersley and Is redundant for tax purposes. A goodwill Impalrment loss of $370 was reported in Year 7. The tax rate for both companles is 40%. Assume that future income taxable payable on the separate entlty financlal statements of the parent and subsidlary are as follows: Required: (a) Calculate goodwill and future Income taxes payable for the consolidated balance sheet at the date of acquisition. (OmIt \$ sign In your response.) (b) Prepare a changes to acquisition schedule for Years 5 through 7. (Leave no cells blank - be certaln to enter "0" wherever requlred. Negatlve/Deductlble amounts should be Indlcated by a minus slgn. Omlt \$ sign In your response.) (c) Calculate goodwill and future income taxes payable for the consolidated balance sheet for Year 7. (OmIt \$ sign In your response.) Future income taxes payable Goodwill
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