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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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