Plain Corporation Acquired a 75% Interest in Swampy Company on January

question 19

Essay

Plain Corporation acquired a 75% interest in Swampy Company on January 1, 2013, for $2,000,000.The book value and fair value of the assets and liabilities of Swampy Company on that date were as follows:
The property and equipment had a remaining life of 6 years on January 1, 2013, and the deferred charge was being amortized over a period of 5 years from that date.Common stock was $1,500,000 and retained earnings was $900,000 on January 1, 2013.Plain Company records its investment in Swampy Company using the cost method.
Required:
Prepare, in general journal form, the December 31, 2013, workpaper entries necessary to:
A.Eliminate the investment account.
B.Allocate and amortize the difference between implied and book value.

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Definitions:

Trust

The confidence or belief in the reliability, truth, ability, or strength of someone or something.

Leader-member Relationship

The dynamic and interaction between a leader and their followers, which can significantly affect performance, motivation, and job satisfaction.

Conscientiousness

A personality trait characterized by diligence, carefulness, and the desire to perform a task well.

Complementary Skill Sets

Diverse abilities and expertise that team members bring to the table, which when combined, enhance team performance and output.