Zone Analysis

week02_templates.xls

Prob 2-7 D&D

Problem 2-7
	100% Purchase with Goodwill
Common Information
Ownership interest		100.00%
Price paid (including direct acquisition costs)		410,000
Acquired company's balance sheet before purchase
	Book	Market	Life		Book	Market
	Value	Value			Value	Value
Priority assets:
Total priority assets	-	-		Total liabilities	0	-
Nonpriority assets:
				Stockholders' equity:
				Paid-in capital in excess of par
Total nonpriority assets	-	-		Retained earnings
				Total equity	0
Existing goodwill
Total assets	-	-		Net assets	0	-
Zone Analysis	Group	Ownership		Cumulative
	Total	Portion		Total
Priority accounts	0	0		0
Nonpriority accounts	0	0		0
Price Analysis
Price =		410,000
Assign to priority accounts		0		full value
Assign to nonpriority accounts
Goodwill
Extraordinary gain
Determination and Distribution of Excess Schedule
Price paid for investment:
Less book value interest acquired:
Common stock
Paid-in capital in excess of par
Retained earnings
Total equity	-
Interest acquired	100.00%
Excess of cost over book value (debit)		-
Excess available		-
Adjustments:
Total	-
Allocation Tables
	Market	Percent		Available	Assign	Book	Adjust
Total to other fixed assets	-	- 0			-	-	-

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Problem 2-7 (concluded)
Year of consolidation
	Balance sheet		Eliminations		NCI	Consol.
	Pantera	Sader	Dr	Cr		Bal. Sht.
Cash	51,000	-
Accounts receivable	65,000	20,000
Inventory	80,000	50,000
Land	100,000	40,000
Investment in Sader	410,000
Buildings	250,000	200,000
Accumulated depreciation - bldgs.	(80,000)	(50,000)
Equipment	90,000	60,000
Accumulated depreciation - equip.	(40,000)	(20,000)
Copyright
Goodwill
Current liabilities	(80,000)	(40,000)
Bonds payable	(200,000)	(100,000)
Common stock - Sader		(10,000)
Paid-in capital in excess of par - Sader		(90,000)
Retained earnings - Sader		(60,000)
Common stock - Pantera	(20,000)
Paid-in capital in excess of par - Pantera	(180,000)
Retained earnings- Pantera	(446,000)
Totals	-	-
NCI
Controlling retained earnings
Totals
	Eliminations and Adjustments:

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