QUESTIONS Chad Company obtains 100 percent of Abe Company's stock on January 1, 2017 As of that date. Abo has the following trial balance Credit Cash and short bomments Account civable Inventory Supplies Bilings ne (4 year romaning ) Equipment (not) (Syow romaningle) Land Accounts payabile Long termes (mature 12/31/20) Common stock Retailed oaming, 1/1/17 Additional paid in capital Totals De 60,000 $40.000 00,000 10.000 120.000 200 000 80 000 $50,000 150 000 250.000 100,000 50 000 $600,000 $600,000 During 2017 Abe reported net income of $80,000 while declanng and paying dividends of $10.000. During 2018, Abe reported net income of $110,000 whilo declaring and paying dividends of $30,000. Assume that Chad acquired Abe's common stock for $490,000 in cash. As of January 1, 2017 Abe's land had a fair value of $90,000 its buildings were valued at $160,000, and its equipment was appraised at $180.000. After the acquisition, Abe Company will remain as a standalone subsidiary Chad has control over Abe Company after the acquisition and Chad uses the equity method for this investment Chad's accountant is preparing schedules on January 1, 2017 after the acquisition Chad's accountant needs to allocate the Excess of Fair value to identifiable Assets possibly Identifiable Liabilities, and Goodwill Hom A What is the Goodwill from this acquisition ($YPlace Htom A in front of your typed answer Answer should include amount and show typed work for partial credit 5 points) Item B. What will be the amortization expense (5) Chad will recognize in 2017 in regards to the acquisition of Abe Company Place "om B in front of your typed answer. Answer should includes amount and show typed work for partial credit 5 points) 13 QUESTIONS Chad Company obtains 100 percent of Abe Company's stock on January 1, 2017 As of that date. Abo has the following trial balance Credit Cash and short bomments Account civable Inventory Supplies Bilings ne (4 year romaning ) Equipment (not) (Syow romaningle) Land Accounts payabile Long termes (mature 12/31/20) Common stock Retailed oaming, 1/1/17 Additional paid in capital Totals De 60,000 $40.000 00,000 10.000 120.000 200 000 80 000 $50,000 150 000 250.000 100,000 50 000 $600,000 $600,000 During 2017 Abe reported net income of $80,000 while declanng and paying dividends of $10.000. During 2018, Abe reported net income of $110,000 whilo declaring and paying dividends of $30,000. Assume that Chad acquired Abe's common stock for $490,000 in cash. As of January 1, 2017 Abe's land had a fair value of $90,000 its buildings were valued at $160,000, and its equipment was appraised at $180.000. After the acquisition, Abe Company will remain as a standalone subsidiary Chad has control over Abe Company after the acquisition and Chad uses the equity method for this investment Chad's accountant is preparing schedules on January 1, 2017 after the acquisition Chad's accountant needs to allocate the Excess of Fair value to identifiable Assets possibly Identifiable Liabilities, and Goodwill Hom A What is the Goodwill from this acquisition ($YPlace Htom A in front of your typed answer Answer should include amount and show typed work for partial credit 5 points) Item B. What will be the amortization expense (5) Chad will recognize in 2017 in regards to the acquisition of Abe Company Place "om B in front of your typed answer. Answer should includes amount and show typed work for partial credit 5 points) 13