Short answer

Top Company obtained 100 percent of Bottom Company's common stock on January 1,206 by lssuing 12,500 shares of its own common stock, which had a $5 par value and a $15 fair value on that date. Bottom reported a net book. - value of $150,000 and its shares had a $20 per share fair value on that date However, some of its plant assets (with a 5 -year remaining life) were undervalued by $20.000 in the company's accounting records. Bottom had also developed a customer list with an estimated fair value of $10,000 and a remaining life of 10 years. Top Company uses the equity-method to account for its investment in Bottom. During 206 Top and Bottom reported the following: Required: Prepare each of the journal entries listed below related to Top's investment in Bottom. 1. Top's acquisition of Bottom . 2. Top's share of Bottom's 20x6 income . 3. Top's share of Bottom's 206 dividend income . 4. Top's amortization of excess acquisition price