Reference no: EM131293254
On 1/1/01 Carter Co acquired 70% of Bush Co. for $350,000. On that date the non-controlling interest had a fair value of $150,000. Bush’s book value on that date was $400,000 (common stock of $40,000, additional paid in capital of $60,000, and retained earnings of $300,000). All of Bush’s assets and liabilities had fair values equal to book value, except: Land, undervalued by $20,000 Inventory (FIFO basis) overvalued by $8,000 PPE, net, 5 year life, undervalued by $60,000 During 2001 and 2002, Bush reported earnings of $60,000 and $80,000, respectively, and paid dividends of $20,000 each year. At the end of 2002, it was determined that the goodwill from the purchase of Bush had been impaired, and needed to be written down to $10,000. Required: Prepare equity method entries and elimination entries for both 2001 and 2002
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: On 1/1/01 Carter Co acquired 70% of Bush Co. for $350,000. On that date the non-controlling interest had a fair value of $150,000. Bush’s book value on that date was $400,000 (common stock of $40,000, additional paid in capital of $60,000, and retain..
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