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Porter Company purchased an 90% interest in the capital stock of Salem Company

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Question;On January 1, 2011, Porter Company purchased;an 90% interest in the capital stock of Salem Company for $850,000.;The;fair value of the noncontrolling interest was proportionate to the;consideration paid by the controlling interest.;At;that time, Salem Company had capital stock of $550,000 and retained earnings;of $80,000.;Differences;between the fair value and the book value of the identifiable assets of Salem;Company were as follows;Under (Over) Valued;Equipment;120,000;Land;25,000;Inventory;40,000;In-Process;Research & Development;40,000;Bonds;payable;-10,000;The;book values of all other assets and liabilities of Salem Company were equal;to their fair values on January 1, 20011;The;inventory was sold in 2011 and the equipment has a 5-year remaining life as;of January 1, 2011.;The;bonds payable mature in 5 years from January 1, 2011;At;12/31/13, Salem owes Porter $25000;Required;for the year ended December 31, 2013;1.;Prepare the analysis as of acquisition date including unamortized;differential at 1/1/11.;2.;Prepare the journal entries Porter recorded with respect to its investment in;Porter for the year ended 12/31/13.;Use;formulas in all calculations.;Clearly;label each part in the spreadsheet tab below;Do problem on "Additional Question" below for;20 points.

 

Paper#45066 | Written in 18-Jul-2015

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