Fortuna Company Issued 70,000 Shares of $1 Par Stock, with a Fair

question 10

Essay

Fortuna Company issued 70,000 shares of $1 par stock, with a fair value of $20 per share, for 80% of the outstanding shares of Acappella Company. The firms had the following separate balance sheets prior to the acquisition:
Book values equal fair values for the assets and liabilities of Acappella Company, except for the property, plant, and equipment, which has a fair value of $1,600,000.
Required:
a.Prepare a value analysis schedule
b.Prepare a determination and distribution of excess schedule.
c.Provide all eliminations on the partial balance sheet worksheet provided in Figure 2-9 and complete the noncontrolling interest column.

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Definitions:

Confidence Interval

A set of values obtained from sample data, which is expected to encompass the value of an unspecified population parameter.

Margin of Error

A statistic expressing the amount of random sampling error in a survey's results, representing the range within which the true population parameter is likely to lie with a certain degree of confidence.

Variance

A statistical measure that tells us how much a set of numbers is spread out; it's the average of the squared differences from the Mean.

Confidence Interval

A range of values, determined from sample statistics, that is likely to contain the value of an unknown population parameter.