Question 2 (14 points):

Paper purchased 12,000 of Sands 30,000 shares on 10/1/20X0 for $36,000. At 1/1/20X0, Sand had Common Stock of $30,000 and Retained Earnings of $50,000. During the 12 months ended 12/31/20X0, Sand earned income of $100,000. Annual dividends of $1 per share were authorized by the Board of Directors to be paid in equal amounts at the end of each quarter. The book values and fair values of Sands assets and liabilities on 10/1/20X0 were as follows: (Note partial year acquisition)

Assets:	Sand Book Values	Sand Fair Values
Cash	$20,000	$20,000
Receivables	30,000	30,000
Inventory (sold in November 20X0)	25,000	40,000
Land	27,500	40,000
Building (10 year Life)	120,000	60,000
Equipment (5 year Life)	40,000	40,000
Patents (5 year life)	0	60,000
Total Assets	$262,500	$290,000
Liabilities:
Accounts Payable	$80,000	$80,000
Notes Payable (Matures on 10/1/20X4)	50,000	70,000

Required:

1. Calculate the Difference (Excess)
2. Calculate the goodwill/(bargain purchase gain)
3. Prepare the purchase price allocation and amortization schedule. (Click here to download excel file), complete it, save it on your computer, and upload your response in the dropbox below)

excel file

Purchase Price Allocation and Amortization Schedule
Account	10/1/20X0 100% Unamortized Difference	10/1/20X0 Difference to Assign	BPG Adjustment (if needed)	20X0 Amortization	12/31/20X0 Unamortized Difference
TOTALS