Amgen Corporation purchased a 40% interest in the common stock of J&J Company fo
ID: 2427590 • Letter: A
Question
Amgen Corporation purchased a 40% interest in the common stock of J&J Company for $2,660,000 on January 1, 2005, when the book value of J&J net equity was $6,000,000. Shallow’s book values equaled their fair values except for the following items: Book Fair Value Value Difference Inventories $450,000 $500,000 $50,000 Land 100,000 450,000 350,000 Building-net 400,000 200,000 (200,000) Equipment-net 350,000 400,000 50,000 $1,300,000 $1,550,000 $250,000 Required: Prepare a schedule to allocate any excess purchase cost to identifiable assets Amgen Corporation purchased a 40% interest in the common stock of J&J Company for $2,660,000 on January 1, 2005, when the book value of J&J net equity was $6,000,000. Shallow’s book values equaled their fair values except for the following items: Book Fair Value Value Difference Inventories $450,000 $500,000 $50,000 Land 100,000 450,000 350,000 Building-net 400,000 200,000 (200,000) Equipment-net 350,000 400,000 50,000 $1,300,000 $1,550,000 $250,000 Required: Prepare a schedule to allocate any excess purchase cost to identifiable assetsExplanation / Answer
Amgen Corporation purchased a 40% interest in the common stock of J&J Company for $2,660,000 on January 1, 2005, when the book value of J&J net equity was $6,000,000. Shallow’s book values equaled their fair values except for the following items:
Required Prepare a schedule to allocate any excess purchase cost to identifiable assets
Amgen Corporation purchased a 40% interest in the common stock of J&J Company for $2,660,000 on January 1, 2005, when the book value of J&J net equity was $6,000,000. Shallow’s book values equaled their fair values except for the following items:
Book value Fair Value Difference Inventories $450,000 $500,000 $50,000 Land $100,000 $450,000 $350,000 Building $400,000 $200,000 ($200,000) Equipment $350,000 $400,000 $50,000 Total $1,300,000 $1,550,000 $250,000Required Prepare a schedule to allocate any excess purchase cost to identifiable assets
Cost of Amgen's 40% Investment in JJ company $2,660,000 Less: Book value of net assets acquired:40% x $6,000,000 $2,400,000 Excess cost over book value acquired $260,000 Schedule to Allocate Cost-Book Value Differentials Book value Fair Value Difference Interest 40% Inventories $450,000 $500,000 $50,000 $20,000 Land $100,000 $450,000 $350,000 $140,000 Building $400,000 $200,000 ($200,000) ($80,000) Equipment $350,000 $400,000 $50,000 $20,000 Total $1,300,000 $1,550,000 $250,000 $100,000 Excess cost over book value acquired $260,000 Excess allocated to specific assets and liabilities ($100,000) Excess allocated To Goodwill $160,000Related Questions
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