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PROBLEM TWO - ALLOCATION SCHEDULE AND COMPUTATIONS GOODWILL-35 PTS Marmel Corporation paid $350,000 cash for 42% of the voting common stock of Kamila Inc. on
PROBLEM TWO - ALLOCATION SCHEDULE AND COMPUTATIONS GOODWILL-35 PTS Marmel Corporation paid $350,000 cash for 42% of the voting common stock of Kamila Inc. on January 1, 2021. Book value and fair value information for Kamila Inc. in this date is as follows: Book Fair Assets Values Values Cash $60,000 $60,000 Accounts receivable 120,000 120,000 Inventories 80,000 100,000 Equipment 340.000 400.000 S 600,000 $ 680,000 Liabilities & Equities Accounts payable $200,000 $200,000 Note payable 120,000 100,000 Capital stock 200,000 Retained earnings 80,000 $600,000 Instructions: 1. Prepare the journal entries for purchased investment. 2. Prepare the analysis of the cost versus the book value of the net assets of the investment bought in Kamila Inc by Marmel Corporation. 3. Prepare the schedule with the differences between the book value and the fair value of the identifiable net assets of Kamila Inc. 4. At the end of the year, Kamila Inc was: a. Net Income for $300,000 b. Paid dividends at Dec 31, 2021 for $35,000 Prepare the journal entries related with net income and dividends received Marmel Corporation for Kamila Inc
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