on january 1, 2010 porter company purchased an 80% interest in the capital stock of salem company for 850000. at that time, salem company had a capital stock for %550,000 and retained earnings for $80,000. Differences between the fair value and the book value of the identifiable assets are salem company were as follows. Equipment $130,000
Land 65000, and inventory 40,000. The book values of all other assets and liabilities of salem company were equal to their fair values on january 1,2010. The equipment had a remaining life of five years n Jan1. The inventory was sold in 2010. 2010 net income $100,000; dividends declared of $25,000. 2011 net incoe $110,000; dividends declared $35,000
Prepare a computation and allocation schedule for the difference between book value of equity aquired and the value implied by the pruchase price.