On 4/1/11, Sey Mold Corporation Acquired 100% of DotDot

question 48

Essay

On 4/1/11, 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 12/31/15.

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Definitions:

Constructors

Constructors are special methods in object-oriented programming that are called when an object is instantiated. They initialize objects with specific states.

Class Definition

The blueprint or template for an object in object-oriented programming, specifying its data and the methods that operate on that data.

Copy Constructor

A constructor in object-oriented programming that initializes an object using another object of the same class.

Secret

Information kept hidden from certain parties, which can also refer to a technique or important fact in various contexts like cryptography.