1)When Peter Pan Co. acquired 75% of the common stock of Smee Corp., Smee owned land...

1)When Peter Pan Co. acquired 75% of the common stock of Smee Corp., Smee owned land with a book value of $70,000 and a fair value of $100,000.

What is the amount of excess land allocation attributed to the controlling interest at the acquisition date?
A. $0.
B. $30,000.
C. $22,500.
D. $25,000.
E. $17,500.

2) Perch Co. acquired 80% of the common stock of Salem Corp. for $1,600,000. The fair value of Salem's net assets was $1,850,000, and the book value was $1,500,000. The noncontrolling interest shares of Salem Corp. are not actively traded.

What amount of goodwill should be attributed to Perch at the date of acquisition?
A. $150,000.
B. $250,000.
C. $0.
D. $120,000.
E. $170,000.

3) When Peter Pan Co. acquired 80% of the common stock of Smee Corp., Smee owned land with a book value of $70,000 and a fair value of $100,000.

What amount should have been reported for the land in a consolidated balance sheet at the acquisition date?
A. $56,000.
B. $70,000.
C. $80,000.
D. $96,000.
E. $100,000

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Expert Solution

ekkarill92 answered 9 months ago

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