To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com CHAPTER UNDERSTANDING THE ISSUES (a) horizontal combination—both are marine engine manufacturers (b) vertical combination—manufacturer buys distribution outlets (c) conglomerate—unrelated businesses Priority Nonpriority Goodwill [($850,000 – $520,000) ÷ 60%] Deferred tax liability ($550,000 × 40%) Net goodwill Group Total $ 20,000 500,000 Cumulative Total $ 20,000 520,000 (a) This price exceeds the fair value of all accounts and allows for goodwill Current assets (fair value) $120,000 Land (fair value) 80,000 Liabilities (fair value) (100,000) Building & equipment (fair value) 400,000 Customer list (fair value) 20,000 Goodwill 280,000 Extraordinary gain — $800,000 By accepting cash in exchange for the net assets of the company, the seller would have to recognize an immediate taxable gain However, if the seller were to accept common stock of another corporation instead, the seller could construct the transaction as a tax-free reorganization The seller could then account for the transaction as a tax-free exchange The seller would not pay taxes until the shares received were sold Identifiable assets (fair value) Deferred tax liability ($200,000 × 40%) Net assets Zone Analysis (b) This price is a bargain The nonpriority accounts are discounted There is $430,000 ($450,000 – $20,000 to priority accounts) available to be allocated to these accounts Current assets (fair value) $120,000 Liabilities (fair value) (100,000) Land [(80 ÷ 500) × $430,000] 68,800 Building & equipment [(400 ÷ 500) × $430,000] 344,000 Customer list [(20 ÷ 500) × $430,000] 17,200 Goodwill — Extraordinary gain — Total $450,000 $600,000 (80,000) $520,000 $550,000 (220,000) $330,000 (a) The net assets and goodwill will be recorded at their full fair value on the books of the parent on the date of acquisition (b) The net assets will be ―marked up‖ to fair value and goodwill will be recorded at the end of the fiscal year when the consolidated financial statements are prepared through the use of a consolidated worksheet (c) This price creates an extraordinary gain Only priority accounts are recorded Current assets (fair value) $120,000 Liabilities (fair value) (100,000) Building & equipment (no amount available) — Customer list (no amount available) — Goodwill — Extraordinary gain (5,000) Total $ 15,000 Puncho will record the net assets at their fair value of $800,000 on its books Also, Puncho will record goodwill of $100,000 ($900,000 – $800,000) resulting from the excess of the price paid over the fair value Semos will record the removal of its net assets at their book values Semos will record a gain on the sale of business of $500,000 ($900,000 – $400,000) (a) Direct cost—Included with the price paid to assign values to net assets, and possibly to goodwill To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Ch 1—Understanding the Issues (b) Direct cost—Included with the price paid to assign values to net assets, and possibly to goodwill (c) Direct cost—Included with the price paid to assign values to net assets, and possibly to goodwill (d) Issue cost—Deducted from the amount assigned to stock issued in the combination (e) Indirect cost—Expensed in the current period (b) In this case, the paid-in capital in excess of par account is reduced for the par value of the additional shares to be issued The fair value of the stock originally issued is being devalued The entry would take the following form: Paid-In Capital in Excess of Par (par value of additional shares issued) Common Stock (par value of additional shares issued) (a) Additional goodwill is recorded because the target was met The entry would take the following form: Goodwill (fair value of stock issued) Common Stock (par value of stock issued) Paid-In Capital in Excess of Par (fair value of stock issued minus par value) To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Ch 1—Exercises EXERCISES EXERCISE 1-1 Current-year income using the purchase method: Combined Net Income Year Ended December 31, 20xx Sales [$800,000 + (1/2 × $500,000)] Less: Cost of goods sold [$400,000 + (1/2 × $300,000)] Operating expenses [$150,000 + (1/2 × $75,000)] Goodwill amortization* Other expenses [$50,000 + (1/2 × $25,000)] Net income *Purchase price Book value of net assets Goodwill Divide by Amortization amount $1,050,000 $ 550,000 187,500 10,000 62,500 240,000 $ 400,000 200,000 $ 200,000 ÷ 10 years $ 20,000 ½ year = $10,000 Current-year income using the pooling method: Combined Net Income Year Ended December 31, 1998 Sales ($800,000 + $500,000) Less: Cost of goods sold ($400,000 + $300,000) Operating expenses ($150,000 + $75,000) Other expenses ($50,000 + $25,000) Net income $1,300,000 $ 700,000 225,000 75,000 300,000 EXERCISE 1-2 (1) Current Assets Land Building Equipment Goodwill Liabilities Cash (includes direct acquisition costs) 100,000 75,000 300,000 275,000 167,000 102,000 815,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Ch 1—Exercises Exercise 1-2, Concluded (2) Cash Liabilities Accumulated Depreciation—Building Accumulated Depreciation—Equipment Current Assets Land Building Equipment Gain on Sale of Business 800,000 100,000 200,000 100,000 80,000 50,000 450,000 300,000 320,000 Note: Seller does not receive direct acquisition costs (3) Investment in Cardinal Company Cash 815,000 815,000 Note: At year-end, Cardinal would be consolidated with Benz, as explained in Chapter EXERCISE 1-3 Cash** Inventory Equipment Land Buildings Discount on Bonds Payable Goodwill* Current Liabilities Bonds Payable Common Stock Paid-In Capital in Excess of Par Cash** 100,000 250,000 220,000 180,000 300,000 140,000 665,000 80,000 550,000 300,000 900,000 25,000 *Total consideration: Common stock (60,000 shares × $20) Direct acquisition costs Price paid Less fair value of assets acquired: Cash Inventory Current liabilities Bonds payable Equipment Land Buildings Value of assets acquired Excess of total cost over fair value of assets **Cash accounts in this entry may be shown as a net amount $1,200,000 25,000 $1,225,000 $ 100,000 250,000 (80,000) (410,000) 220,000 180,000 300,000 $ 560,000 665,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Ch 1—Exercises Exercise 1-3, Concluded In a purchase, assets acquired and liabilities assumed are recorded at fair value Direct acquisition costs are added to the total purchase price of the acquisition As an end result, the direct acquisition costs are assigned to Goodwill or to the value of the separable assets in a bargain purchase General Expense Cash Indirect acquisition costs are expensed 30,000 Paid-In Capital in Excess of Par Cash 10,000 30,000 10,000 In a purchase, the costs to register and issue stock are treated as a reduction of the amount received for the stock EXERCISE 1-4 Pro Forma Income Statement Year Ended December 31, 20X2 Sales Less: Cost of goods sold ($340,000 + $25,000) Operating expenses ($185,000 + $5,250*) Other expenses Net income *Operating expenses had the following adjustments: Depreciation expense: Equipment ($30,000 ÷ 20 years) Buildings ($75,000 ÷ 20 years) Total adjustments $700,000 $ $ $ 365,000 190,250 50,000 94,750 1,500 3,750 5,250 EXERCISE 1-5 Purchase Price: Cash Direct acquisition costs incurred Total purchase price $180,000 10,000 $190,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Ch 1—Exercises Exercise 1-5, Concluded Group Total Zone Analysis Priority accounts Nonpriority accounts $140,000 55,000 Price paid Assign to priority Assign to nonpriority Goodwill Extraordinary gain $190,000 140,000 50,000 — — Cumulative Group Total $140,000 195,000 Journal Entry: Accounts Receivable* Inventory* Equipment [(40 ÷ 55) $50,000] Brand-Name Copyright [(15 ÷ 55) × $50,000] Cash Current Liabilities* Mortgage Payable* 200,000 270,000 36,364 13,636 190,000 80,000 250,000 *Fair value Dr = Cr check amounts 520,000 520,000 Acquisition Expense** Cash 15,000 15,000 **Indirect acquisition costs EXERCISE 1-6 Purchase Price: Cash Direct acquisition costs incurred Total purchase price Group Total Zone Analysis Priority accounts Nonpriority accounts $140,000 55,000 Price paid Assign to priority Assign to nonpriority Goodwill Extraordinary gain $135,000 140,000 — — 5,000 $125,000 10,000 $135,000 Cumulative Group Total $140,000 195,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Ch 1—Exercises Exercise 1-6, Concluded Journal Entry: Accounts Receivable* Inventory* Cash Current Liabilities* Mortgage Payable* Extraordinary Gain *Fair value 200,000 270,000 Dr = Cr check amounts 470,000 135,000 80,000 250,000 5,000 470,000 Note: There is no amount available to allocate to the nonpriority assets (equipment and brand-name copyrights) Acquisition Expense** Cash **Indirect acquisition costs 15,000 15,000 EXERCISE 1-7 Purchase Price: Cash Direct acquisition costs incurred Total purchase price $400,000 18,000 $418,000 Group Total Zone Analysis Priority accounts Nonpriority accounts $ Price paid Assign to priority Assign to nonpriority Goodwill Extraordinary gain Cumulative Group Total 28,000* 500,000 $ 28,000 528,000 $418,000 28,000 390,000 — — *$120,000 current assets – $92,000 liabilities Assignment and Allocation Schedule Fair Value Nonpriority Accounts Land Buildings (net) Equipment (net) Patents Total nonpriority accounts $ 80,000 250,000 150,000 20,000 $500,000 Percentage 16% 50% 30% 4% 100% Amount to Allocate Allocated or Assigned Amount $390,000 $ 390,000 390,000 390,000 62,400 195,000 117,000 15,600 $390,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Ch 1—Exercises Exercise 1-7, Concluded Journal Entry: Currents Assets* Land (from schedule) Buildings (net) (from schedule) Equipment (net) (from schedule) Patents (from schedule) Cash Liabilities* *Fair value 120,000 62,400 195,000 117,000 15,600 Dr = Cr check amounts 510,000 Acquisition Expense** Cash **Indirect acquisition costs 5,000 418,000 92,000 510,000 5,000 EXERCISE 1-8 Purchase Price: Cash Direct acquisition costs incurred Total purchase price Group Total Zone Analysis $ 5,000 18,000 $23,000 Cumulative Group Total Priority accounts Nonpriority accounts $ 28,000 500,000 Price paid Assign to priority Assign to nonpriority Goodwill Extraordinary gain $ 23,000 28,000 $ 28,000 528,000 — — 5,000 Journal Entry: Currents Assets* Cash Liabilities* Extraordinary Gain *Fair value 120,000 Dr = Cr check amounts 120,000 23,000 92,000 5,000 120,000 Note: There is no amount available to allocate to the nonpriority assets (land, buildings, equipment, and patents) Acquisition Expense** Cash **Indirect acquisition costs 5,000 5,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Ch 1—Exercises EXERCISE 1-9 (1) Purchase price Fair value of net assets other than goodwill Goodwill $600,000 400,000 $200,000 The estimated value of the unit exceeds $600,000, confirming goodwill (2) (a) Estimated fair value of business units Book value of Anton net assets, including goodwill $520,000 $500,000 No impairment exists (b) Estimated fair value of business units Book value of Anton net assets, including goodwill $400,000 $450,000 Estimated fair value of business units Fair value of net assets, excluding goodwill Re-measured amount of goodwill Existing goodwill Impairment loss $400,000 340,000 60,000 200,000 $140,000 $ EXERCISE 1-10 Machine = $200,000 Because goodwill (excess of total cost over the fair value of the net assets acquired) resulted from the purchase, the purchase asset may be recorded at its appraised value Deferred tax liability = $16,800 In this tax-free exchange, depreciation on $56,000 ($200,000 appraised value) – ($144,000 net book value) of the machine’s value is not deductible on future tax returns The additional tax to be paid as a result of Lewison’s inability to deduct the excess value assigned to the machine is $16,800 ($56,000 × 30%) Goodwill = $116,800 (net of deferred tax liability) $800,000 – ($700,000 – $16,800) Recorded as: Goodwill ($116,800 ÷ 70%) Deferred tax liability (30% × $166,857) Net of tax goodwill $166,857 (50,057) $116,800 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com PROBLEM SA2-2 (1) Value Analysis Parent Price Price paid Fair value of net assets excluding goodwill Goodwill Gain NCI 950,000 237,500 680,000 270,000 n/a 170,000 67,500 Determination and Distribution of Excess Schedule Company Parent Value Price Fair value of subsidiary: 1,187,500 950,000 Less book value interest acquired: Common stock 10,000 Paid-in excess of par 190,000 Retained earnings 140,000 Total equity 340,000 Interest acquired 80.00% Book value 272,000 Excess of cost over book value 847,500 678,000 Adjustments to accounts: Inventory Land Buildings Equipment Patent Computer software Premium on bonds payable Goodwill ($337,000 – $60,000) Extraordinary gain Total 325 (20,000) 100,000 200,000 110,000 140,000 50,000 (10,000) 277,500 — 847,500 Company 1,187,500 850,000 337,500 — NCI 237,500 20.00% 68,000 169,500 Worksheet Distribution credit D1 debit D2 debit D3 debit D4 debit D5 debit D6 credit D7 debit D8 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA2-2, Continued Parton Company and Subsidiary Soma Corporation Worksheet for Consolidated Financial Statements For Year Ended December 31, 20X1 (2) Balance Sheet Parton Soma Cash Accounts Receivable 350,000 Inventory 510,000 Investment in Soma Land 1,000,000 Buildings 3,300,000 Accumulated Depreciation (600,000) Equipment 850,000 Accumulated Depreciation (280,000) Patent 150,000 Computer Software 50,000 Goodwill 337,500 Current Liabilities (240,000) Bonds Payable (500,000) Premium on Bonds Payable Common Stock—Soma Paid-In Excess—Soma Retained Earnings—Soma Eliminations Dr Cr 170,000 300,000 50,000 410,000 120,000 950,000 800,000 100,000 2,800,000 300,000 (500,000) (100,000) 600,000 140,000 (230,000) (50,000) 10,000 (D6) 60,000 NCI (D1) (D4) 110,000 (D5) 140,000 50,000 (D8) 277,500 (150,000) (90,000) (300,000) (200,000) (10,000) (190,000) (140,000) (EL) (EL) (EL) 326 170,000 20,000 (EL) 272,000 (D) 678,000 (D2) 100,000 (D3) 200,000 Consolidated Balance Sheet (D7) 10,000 (10,000) 8,000 (2,000) 152,000 (38,000) 112,000 (NCI) 169,500 (197,500) To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Common Stock—Parton Paid-In Excess—Parton (3,655,000) Retained Earnings—Parton (1,100,000) Totals (95,000) (3,655,000) (1,100,000) 0 1,149,500 1,149,500 NCI (237,500) (237,500) Totals 327 (95,000) To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA2-2, Concluded Eliminations and Adjustments: (EL) Eliminate parent ownership interest (D) Distribute excess (NCI) Adjust NCI to fair value Distribute adjustments: (D1) (D2) (D3) (D4) (D5) (D7) (D8) Inventory Land Buildings Equipment Patent Computer software Goodwill 328 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com CHAPTER PROBLEMS PROBLEM SA3-1 (1) Parent Price Value Analysis Company fair value Fair value of net assets excluding GW Goodwill Gain 308,000 268,000 40,000 n/a NCI Value 77,000 67,000 10,000 Determination and Distribution of Excess Schedule Company Parent Value Price Fair value of subsidiary: 385,000 308,000 Less book value interest acquired: Common stock 50,000 Paid-in excess of par 100,000 Retained earnings 150,000 Total equity 300,000 Interest acquired 80.00% Book value of interest 240,000 Excess of cost over book value (debit) 85,000 68,000 Allocated to: Inventory Buildings Goodwill Total adjustments 329 Company Value 385,000 335,000 50,000 — NCI Value 77,000 20.00% 60,000 17,000 Amortization 10,000 debit D1 25,000 10 debit D2 50,000 debit D3 85,000 2,500 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA3-1, Continued Amortization Schedules Year of Consolidation Account Adjustments Inventory Subject to amortization: Buildings and equipment 5,000 A2 Total amortizations 5,000 Life — Annual Current Amount Year $ 10,000 — 10 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ $ Prior Years — Total — Key D1 Income Distribution Schedules Subsidiary Company Amortizations $2,500 Internally generated net income $90,000 Total NCI share Controlling share $87,500 17,500 70,000 Parent Company Internally generated net income Controlling share of subsidiary $100,000 70,000 Total $170,000 330 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA3-1, Continued (2) Worksheet Year of Consolidation Trial Balance Peres Soll Inventory 150,000 Other Current Assets 328,000 Investment in Soll Land 100,000 Buildings and Equipment 695,000 Accumulated Depreciation (165,000) Goodwill 50,000 Other Intangible Assets 20,000 Current Liabilities (160,000) Bonds Payable (100,000) Other Long-Term Liabilities (200,000) Common Stock—Soll Eliminations Dr Cr Consolidated Net Income NCI Controlling Retained Earnings 100,000 50,000 148,000 180,000 24,000 (EL) (D) (CY1) 72,000 272,000 68,000 5,000 (40,000) (100,000) 388,000 (CY2) 50,000 50,000 350,000 320,000 (100,000) (60,000) (D3) 20,000 (120,000) (200,000) (D2) 25,000 (A2) 50,000 Consolidated Balance Sheet (50,000) (EL) 40,000 (10,000) Paid-In Excess—Soll (100,000) (EL) 80,000 (20,000) Retained Earnings—Soll (190,000) (EL) 152,000 (52,500) (NCI) 17,000 (D1) 2,000 (A2) 500 331 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA3-1, Concluded Worksheet Year of Consolidation (Concluded) Trial Balance Peres Soll Common Stock—Peres (200,000) Paid-In Excess—Peres (100,000) Retained Earnings—Peres Net Sales Eliminations NCI Controlling Retained Earnings Consolidated Balance Sheet Dr Cr Consolidated Net Income (200,000) (100,000) (970,000) (204,000) 560,000 (A2) 2,500 222,500 (214,000) (D1) 8,000 (A2) 2,000 (520,000) (450,000) Cost of Goods Sold 300,000 260,000 Operating Expenses 120,000 100,000 Subsidiary (Dividend) Income (72,000) (CY1) 72,000 Dividends Declared—Soll 30,000 (CY2) 24,000 6,000 Dividends Declared—Peres 50,000 Totals 0 458,000 458,000 Consolidated Net Income (187,500) NCI Share 17,500 (17,500) Controlling Share 170,000 (170,000) NCI (94,000) (94,000) Controlling Retained Earnings (324,000) Totals Eliminations and Adjustments: (CY1) Current-year subsidiary income (CY2) Current-year dividend (EL) Eliminate controlling interest in Sub equity (D) Distribute excess (D1) Inventory (retained earnings) 332 50,000 (324,000) To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com (D2) (D3) (A2) Buildings and equipment Goodwill Amortize excess 333 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com PROBLEM SA3-2 (1) Parent Price Value Analysis Company fair value 300,000 Fair value of net assets excluding goodwill Goodwill Gain 347,200 — 47,200 NCI Value 75,000 86,800 86,800 — Determination and Distribution of Excess Schedule Company Parent Value Price Price paid for investment: 386,800 300,000 Less book value interest acquired: Common stock 10,000 Paid-in excess of par 90,000 Retained earnings 112,000 Total equity 212,000 Interest acquired 80.00% Book value of interest 169,600 Excess of cost over book value (debit) 174,800 130,400 Allocated to: Accounts receivable Inventory Accounts payable Bonds payable Land Buildings Equipment Goodwill Gain Total adjustments 334 Company Value 386,800 434,000 — 47,200 NCI Value 86,800 20.00% 42,400 44,400 Amortization — (2,000) — 4,000 90,000 — 100,000 20 30,000 — (47,200) 174,800 credit D1 debit D3 debit D2 debit D4 debit D5 credit D7 800 5,000 6,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA3-2, Continued Amortization Schedules Year of Consolidation Account adjustments Inventory (2,000) D1 Subject to amortization: Bonds payable Buildings Equipment 18,000 A5 Total amortizations Life Annual Current Amount Year $ (2,000) — 20 800 $ 800 5,000 5,000 6,000 $ 11,800 $11,800 Prior Years Total $ (2,000) $ Key 1,600 2,400 A3 10,000 15,000 A4 6,000 12,000 $23,600 $35,400 Income Distribution Schedules Subsidiary Company Amortizations $11,800 Internally generated net income $35,000 Total NCI share Controlling share $23,200 4,640 18,560 Parent Company Internally generated net income Controlling share of subsidiary $165,000 18,560 Total $183,560 335 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA3-2, Continued Worksheet Year of Consolidation Trial Balance Pcraft Sailair Cash 342,000 Accounts Receivable 145,000 Inventory 206,000 Land 250,000 Investment in Sailair Buildings 1,200,000 Accumulated Depreciation (315,000) Equipment 280,000 Accumulated Depreciation (180,000) Goodwill Current Liabilities (162,000) Bonds Payable (100,000) Discount (Premium) Eliminations Dr Cr Consolidated Net Income NCI Controlling Retained Earnings 282,000 60,000 90,000 55,000 120,000 86,000 100,000 60,000 (D2) 90,000 376,000 (CY1) 28,000 (CY2) 8,000 (EL) 225,600 (D) 130,400 800,000 300,000 (D4) 100,000 15,000 18,000 (80,000) 150,000 100,000 (90,000) (72,000) (60,000) (102,000) (2,000) (18,000) 1,600 (76,480) Common Stock—Sailair Paid-In Excess—Sailair Retained Earnings—Sailair (A4) (220,000) (100,000) Consolidated Balance Sheet (D5) 30,000 (A5) (D3) 4,000 (A3) 2,400 (10,000) (EL) 8,000 (90,000) (EL) 72,000 (182,000) (EL) 145,600 (D) 44,400 (D1) 400 (A3–A5) 4,720 336 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Common Stock—Pcraft (100,000) Paid-In Excess—Pcraft (900,000) Retained Earnings—Pcraft (100,000) (900,000) (375,000) (D7) 47,200 (D1) 1,600 (A3–A5) 18,880 (404,920) 337 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA3-2, Concluded Worksheet Year of Consolidation (Concluded) Trial Balance Pcraft Sailair Eliminations Dr Cr Consolidated Net Income NCI Controlling Retained Earnings Consolidated Balance Sheet Sales (800,000) (350,000) (1,150,000) Cost of Goods Sold 450,000 210,000 660,000 30,000 15,000 (A4) 5,000 50,000 15,000 140,000 14,000 68,000 (A5) 6,000 35,000 208,000 8,000 (28,000) (A3) 800 (CY1) 28,000 8,800 Depreciation Expense— Buildings Depreciation Expense— Equipment Other Expenses Interest Expense Gain on Purchase Subsidiary (Dividend) Income Dividends Declared—Sailair 10,000 (CY2) 8,000 2,000 Dividends Declared—Pcraft 20,000 Totals 0 521,000 521,000 Consolidated Net Income (188,200) NCI Share 4,640 (4,640) Controlling Share 183,560 (183,560) NCI (99,120) (99,120) Controlling Retained Earnings (568,480) Totals Eliminations and Adjustments: (CY1) Current-year subsidiary income (CY2) Current-year dividend (EL) Eliminate controlling interest in Sub equity (D) Distribute excess (A) Amortize excess 338 20,000 (568,480) To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 339 ... value of stock issued) Common Stock (par value of stock issued) Paid-In Capital in Excess of Par (fair value of stock issued minus par value) To download more slides, ebook, solutions and test... 1-2 Purchase Price: Number of shares exchanged Par value of a share of stock Market value of a share of stock Verk 30,000 $10 $40 Market value of stock exchanged ... PROBLEM 1-5 Purchase Price: Number of shares exchanged Par value of a share of stock Market value of a share of stock Market value of stock exchanged Direct