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

question 65

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 consolidation at the year-end date of 12/31/19.

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Definitions:

Nonretentive Outputs

Output signals or data in a control system that do not maintain their state after a power cycle or reset.

Latch Instruction

One-half of an instruction pair (the second instruction of the pair being the unlatch instruction) that emulates the latching action of a latching relay. The latch instruction for a programmable logic controller energizes a specified output point or internal coil until it is de-energized by a corresponding unlatch instruction.

MCR Zone

In programmable logic controllers (PLCs), a Master Control Relay zone, which refers to a section of the program controlled by a master relay for safety or operational purposes.