Requlred Informetion West Company acquired 60 percent of Solar Company for $319,

Question

Requlred Informetion West Company acquired 60 percent of Solar Company for $319,500 when Solars book value was $419,500. The newly comprised 40 percent noncontrolling Interest had an assessed fair value of $213,000. Also at the acquisition date, Solar had a trademark (with a 20-year life) that was undervalued in the financial records by $73,000. Also, patented technology (with a 10-year life) was undervalued by $53,000. Two years later, the following figures are reported by these two companles (stockholders' equity accounts have been omitted): West Company Solar Company olar Company B Value 633,000 273,000 423,000 Book Value 313,000 213,000 163,000 (133,000) (413,000) 313,000 Fair Value Trader ar ks Patented technology Liabilities 333,000 293,000 163,000 (133,000) (403,000) (913,000 487,000 Not giren Investment incone What is the consolidated trademarks balance? Multiple Choice $555,350. $562650. $559,000. $551,700

Explanation / Answer

Ans: Option D

   Solution: Amortisation of Increased Value of Trademark for two years = 73000/Useful life x 2 years

= $ 7300

   Value of Trademark = $(273000+213000+73000-7300)

                                                 = $ 551,700

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.