Pathmos Inc. acquires 70% of Getfert Company for $420,000. In its single financial statements Pathmos accounts for this investment using the equity method. The remaining of 30% of Getfert’s outstanding shares continue to trade at a collective value of $174,000. On the acquisition date, Getfert has the following accounts.

Getfert	Book Value	Fair Value
Current assets	210,000	210,000
Land	170,000	180,000
Buildings	300,000	330,000
Liabilities	-280,000	-280,000

The buildings have a 10y remaining life. In addition, Getfert holds a patent worth $140,000 that has a 5 year remaining life but is not recorded on its financial records. At the end of the year, the two companies report the following balances:

Pathmos	Getfert
Revenues	-900,000	-600,000
Expenses	600,000	400,000
Equity in Getfert income	?

Q1.

Compute goodwill allocation to the controlling and non-controlling interest

Q2.

Assume that the acquisition took place on Jan. 1. What amounts would appear in a consolidated income statement for this year?

Q3.

Assume that the acquisition took place on Apr. 1. Getfert’s revenues and expenses occurred uniformly throughout the year. What amounts would appear in a consolidated income statement for this year?