On January 1, 2013, Smith Company acquired 80,000 shares of Bonn Logistics, Inc. for $32 per share. This gave Smith a 35 percent ownership of Bonn and Smith utilized the equity method to account for this acquisition. As of the date of acquisition, Bonn had assets with a book value of $8,000,000 and liabilities of $1,500,000. Equipment held by Bonn appraised at $50,000 above book value and was considered to have a 10-year remaining life. In addition, Bonns building was appraised for $1,400,000, but had a book value of $750,000 with a 20-year remaining life. Any remaining excess cost was attributable to goodwill. Depreciation and amortization utilizes the straight-line method. Income and dividends for the years ended December 31, 2013, 2014, and 2015, are as follows, respectively:

Income = $180,000, $260,000, $320,000; Dividends = $30,000, $40,000, $60,000.

A. Prepare a schedule that identifies the allocation of the investment amount by Smith in the acquisition of Bonn. Make sure to identify the individual steps / parts a you develop and display the solution. B. Develop a schedule to illustrate the amount of excess amortization associated with the undervalued assets.