Question

Dodd Co. acquired 75% of the common stock of Wallace Corp. for $1,800,000. The fair value of Wallace’s net assets was $2,100,000, and the book value was $1,900,000. The noncontrolling interest shares of Wallace Corp. are not actively traded.What is the dollar amount of fair value over book value differences for identifiable net assets attributed to Dodd at the date of acquisition?

Answer 1

Solution:
	CALCULATION OF NET ASSETS OVER BOOK VALUE
	Particulars	Amount
	Fair value of net assets	$               2,100,000
	Less: Book Value of the Assets	$               1,900,000
	Net Assets over book value	$                  200,000
	CALCULATION OF AMOUNT ATTRIBUTED TO DODD Co.
	Dadd Co. acquired 70% of Wallace Corp.
	Net Assets over book value	$                  200,000
	Net Assets over book value attributed to Dadd Co. = ($ 200,000 X 70%)	$                  140,000
Answer = $ 140,000