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On 1/1/19, Sey Mold Corporation Acquired 100% of DotDot

question 41

Essay

On 1/1/19, Sey Mold Corporation acquired 100% of DotDot.Com for $2,000,000 cash. On the date of acquisition, DotDot's net book value was $900,000. DotDot's assets included land that was undervalued by $300,000, a building that was undervalued by $400,000, and equipment that was overvalued by $50,000. The building had a remaining useful life of 8 years and the equipment had a remaining useful life of 4 years. Any excess fair value over consideration transferred is allocated to an undervalued patent and is amortized over 5 years.Determine the amortization expense related to the combination at the year-end date of 12/31/19.

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Definitions:

Stereotyping

The act of assigning a fixed set of characteristics to a group of people, regardless of the individual differences and nuances among them.

Japanese Student

A student from Japan or of Japanese descent, potentially referring to their experiences, culture, or educational background.

Exploitation

The unfair use of people’s time or labour without compensating them fairly.

Corporation

An independent legal entity owned by shareholders, characterized by limited liability, perpetual succession, and the capacity to enter into contracts.

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