Positivism Corporation paid $150,000 for an 30% interest in Science Tech Corporation on January 1, 20X1 when the stockholders' equity of Science Tech consisted of $200,000 capital stock and $160,000 retained earnings. The following assets of Science Tech had fair values different from their book values when Positivism acquired its interest: Book Value Fair Value Inventories (sold in 20X1) $ 50,000 $ 60,000 Equipment (8-year life at the time of combination) Bonds Payable (matures 12/31/X5) 600,000 (500,000) 640,000 (525,000) During 20X1, Science Tech’s reported net income was $50,000 and dividends declared and paid were $10,000. 1. Calculate Excess/Difference: 2. Calculate Goodwill

Positivism Corporation paid $150,000 for an 30% interest in Science Tech Corporation on January 1, 20X1 when the stockholders' equity of Science Tech consisted of $200,000 capital stock and $160,000 retained earnings. The following assets of Science Tech had fair values different from their book values when Positivism acquired its interest: Book Value Fair Value Inventories (sold in 20X1) $ 50,000 $ 60,000 Equipment (8-year life at the time of combination) Bonds Payable (matures 12/31/X5) 600,000 (500,000) 640,000 (525,000) During 20X1, Science Tech’s reported net income was $50,000 and dividends declared and paid were $10,000. 1. Calculate Excess/Difference: 2. Calculate Goodwill

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 1BCRQ

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