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Albers Company acquires an 80% interest in Barker

Company on January 1 2011 for $850000. The following determination and distribution of

excess schedule is prepared at the time of purchase:

Determination and Distribution of Excess Schedule

Company Parent NCI

Implied Fair Price Value

Value (80%) (20%)

Fair value of subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . $1062500 $850000 $212500

Less book value of interest acquired:

Total equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 600000 $600000 $600000

Interest acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80% 20%

Book value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . %u2026.. $480000 $120000

Excess of fair value over book value . . . . . . . . . . . . . . . . .. $ 462500 $370000 $ 92500

Adjustment of identifiable accounts:

Adjustment Amortization Worksheet

per Year Life Key

Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 200000 $ 10000 20 debit D1

Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262500 debit D2

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 462500

Albers uses the simple equity method for its investment in Barker. As of December 31

2015 Barker has earned $200000 since it was purchased by Albers. Barker pays no dividends

during 2011%u20132015.

On December 31 2015 the following values are available:

Fair value of Barker%u2019s identifiable net assets (100%) . . . . . . . . . . . . . . . . . . . . . . . . . . $ 900000

Estimated fair value of Barker Company (net of liabilities) . . . . . . . . . . . . . . . . . . . . . 1000000

Determine if goodwill is impaired. If not explain your reasoning. If so calculate the loss on

impairment.

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