Question
On June 30, 2021, Plaster, Inc., paid $876,000 for 80 percent of Stucco Company's outstanding stock. Plaster assessed the acquisition-date fair value of the
On June 30, 2021, Plaster, Inc., paid $876,000 for 80 percent of Stucco Company's outstanding stock. Plaster assessed the acquisition-date fair value of the 20 percent noncontrolling interest at $219,000. At acquisition date, Stucco reported the following book values for its assets and liabilities: Cash Accounts receivable Inventory Land Buildings Equipment $ 57,300 121,500 194,400 62,400 167,900 287,600 Accounts payable (33,500) (Parentheses indicate credit balances.) On June 30, Plaster allocated the excess acquisition-date fair value over book value to Stucco's assets as follows: Equipment (3-year remaining life) Database (10-year remaining life) $ 71,600 165,800 At the end of 2021, the following comparative (2020 and 2021) balance sheets and consolidated income statement were available: Plaster, Inc. December 31, Consolidated December 31, Cash Accounts receivable (net) Inventory Land Buildings (net) Equipment (net) Database Total assets Accounts payable Long-term liabilities Common stock Noncontrolling interest Retained earnings 2020 $ 40,500 340,800 390,900 282,600 230,700 1,695,000 0 $ 2,980,500 $ 75,600 378,000 1,701,000 825,900 Total liabilities and equities $ 2,980,500 2021 $ 228,700 457,100 677,800 345,000 348,600 1,927,500 157,510 $ 4,142,210 $ 101,100 1,106,480 1,701,000 241,400 992,230 $ 4,142,210
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