Question

On January 1, 2010, Petrel, Inc. purchased 70% of the outstanding voting common stock of Ocean, Inc., for $2,600,000. The book value of Ocean's net equity on that date was $3,100,000. Book values were equal to fair values except as follows:

Book Fair

Assets & Liabilities Values Values

Equipment $ 250,000 $ 190,000

Building 600,000 700,000

Note payable 270,000 240,000

Required:

Prepare a schedule to allocate any excess purchase cost to specific assets and liabilities.

Answer

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