Question
The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $7.70 per share on January 1, 2014. The remaining
The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $7.70 per share on January 1, 2014. The remaining 20 percent of Devines shares also traded actively at $7.70 per share before and after Holtzs acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devines underlying accounts except that a building with a 5-year life was undervalued by $81,000 and a fully amortized trademark with an estimated 10-year remaining life had a $75,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $290,000. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Following are the separate financial statements for the year ending December 31, 2015:
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