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Unformatted text preview: E2-19 Equity Entries with Positive and Negative Goodwilla.Journal entries recorded following purchase for $175,000:$175,000 - 40%(100,000+30,000+170,000) = $55,000Book ValueFair Value40% of DiffLifeAmortInventory120,000130,0004,00014,000B&E150,000240,00036,000103,600Goodwill15,00055,0007,600(1)Investment in Turner Corporation175,000Cash175,000Record purchase of Turner stock.(2)Cash3,200Investment in Turner Corporation3,200Record dividend from Turner:$8,000 x .40(3)Investment in Turner Corporation16,000Income from Turner Corporation16,000Record equity-method income:$40,000 x .40(4)Income from Turner Corporation4,000Investment in Turner Corporation4,000Write off purchase differential assigned to inventory carried on FIFO basis:$10,000 x .40(5)Income from Turner Corporation3,600Investment in Turner Corporation3,600Amortize purchase differential assigned to buildings and equipment:Solutions Manual- Baker/Lembke/King, Advanced Financial Accounting, 6/e1E2-19(continued)b.Journal entries recorded following purchase for $140,000:...
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This note was uploaded on 04/18/2008 for the course ACCT cost taught by Professor Staff during the Spring '08 term at Oklahoma State.
- Spring '08