Question
1. Dodd Co. acquired 75% of the common stock of Wallace Corp. for $1,800,000. The fair...
1. 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 total amount of goodwill recognized at the date of acquisition?
a. $0
b. $300,000
c. $200,000
d. $700,000
e. $100,000
2. When Valley Co. acquired 80% of the common stock of Coleman Corp., Coleman owned land with a book value of $75,000 and a fair value of $125,000.
What is the total amount of excess land allocation at the acquisition date?
a. $75,000
b. $40,000
c. $50,000
d. $60,000
e. $0
3.
Scott Co. paid $2,800,000 to acquire all of the common stock of Dawn Corp. on January 1, 2020. Dawn’s reported earnings for 2020 totaled $512,000, and it paid $160,000 in dividends during the year. The amortization of allocations related to the investment was $28,000. Scott’s net income, not including the investment, was $3,310,000, and it paid dividends of $950,000.
What is the amount of consolidated net income for the year 2020?
a. $3,282,000
b. $3,794,000
c. $3,822,000
d. $3,150,000
e. $3,310,000
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