What is the total amount of excess amortization

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Reference no: EM131294384

On January 3, 2011, Austin Corp. purchased 25% of the voting common stock of Gainsville Co., paying $2,500,000. Austin decided to use the equity method to account for this investment. At the time of this investment, Gainsville's total stockholder's equity was $8,000,000. Austin gathered the following information about Gainsville's assets and liabilities: Buildings (10 year life) had a book value of $400,000 and a fair value of $500,000, equipment (5 year life) had a book value of $1,000,000 and a fair value of $1,300,000, and franchises (8 year life) had a book value of $0 and a fair value of $400,000. For all other assets and liabilities, book value and fair value were equal. Any excess of cost over fair value was attributed to goodwill, which has not been impaired. For 2011, what is the total amount of excess amortization for Austin's 25% investment in Gainsville? Please show work.

Reference no: EM131294384

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