(Answered) Question - on january 1 2011 the travis corporation

Accounting

Question - On January 1, 2011, the Travis Corporation purchased a 22% in Scott Company by procuring 5000 shares of the 25,000 outstanding shares of common stock. The acquisition price was $32.50 a share. On the date of this procurement, Scott Company's net assets were defined as the following:

Non-depreciated current assets: Book value-$65,000, Fair value-$73,000, Difference-$8,000

Depreciable assets: Book value-$163,000, Fair value-$178,000, Difference-$15,000

TOTAL Assets: Book value $228,000, Fair value $251,000, Difference $23,000.

The total liabilities has a book and fair value of $90,000.

During 2011, Scott Company had earned income of $76,000 and paid dividends of $16,000. The depreciated items have a useful life of 5 years remaining and no residual value.

Prepare all the necessary journal entries on Travis's books to record the acquisition and the events subsequent to the initial investments.

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