Whitney Company acquires an 80% interest in Masters Company common stock on January 1, 2011. Appraisals of Masters€™ assets and liabilities are performed, and Whitney ends up paying an amount that is greater than the fair value of Masters€™ net assets and reflects a premium to achieve control. The fair value of the NCI is $235,000. The following partial determination and distribution of excess schedule is created on January 1, 2011, to assist in putting together the consolidated financial statements:

Prepare amortization schedules for the years 2011, 2012, 2013, and 2014.

Transcribed Image Text:

Determination and Distribution of Excess Schedule Parent Price 80%) $1,335,000 $1,100,000 $235,000 Company Implied Fair NCI Value Value Fair value of subsidiary. Less book value of interest acquired 100,000 Common stock. Paid-in capital in excess of par Retained earnings 150,000 350,000 Total equity $ 600,000 $600,000$600,000 Interest acquired 80% 20% Book value Excess of fair value over book value.. Ad $480,000 $120,000 $735,000 $ 620,000 $115,000 justment of identifiable accounts: Amortization Adjustment perYear Life Key 5,000 50,000 250,000 172,500 22,500 20,000 12,500 186,250 Investments Land Buildings Equipment. 20 Patent Trademark Discount on bonds payable. . Goodwill Total 735,000