Passcode Incorporated Acquired 90% of Safe Systems International for $540,000,the

question 42

Essay

Passcode Incorporated acquired 90% of Safe Systems International for $540,000,the market value at that time.On the date of acquisition,Safe Systems showed the following balances on their ledger:
Safe Systems has determined that their buildings have a remaining life of 10 years,and their equipment has a remaining useful life of 8 years.
Requirement 1: Calculate the amount of goodwill that will appear on the general ledger of Passcode and Safe Systems,as well as the amount that will appear on the consolidated financial statements.
Requirement 2: Calculate the amount of amortization that will appear on the consolidated financial statements for buildings and equipment,and explain how this amortization of excess fair value is shown on the separate general ledgers of Passcode and Safe Systems.

---

Definitions:

Pineal Gland

A small endocrine gland in the brain that produces melatonin, a hormone that regulates sleep-wake cycles.

25-Hour Day

A concept referring to the phenomenon where the internal body clock, or circadian rhythm, naturally leans towards a slightly longer cycle than the 24-hour day.

Jet Lag

A temporary sleep disorder resulting from travel across multiple time zones, disrupting the body's internal clock or circadian rhythm.

Night's Sleep

The period of restful unconsciousness and inactivity the body undergoes during the night to recover and rejuvenate.