The Following Information Pertains to Questions

question 51

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The following information pertains to questions
MAX Inc.purchased 80% of the voting shares of MIN Inc for $750,000 on January 1,2007.On that date,MAX's common stock and retained earnings were valued at $300,000 and $150,000 respectively.Unless otherwise stated,assume that MAX uses the cost method to account for its investment in MIN Inc.
MIN's fair values approximated its carrying values with the following exceptions:
MIN's trademark had a fair value which was $80,000 higher than its carrying value.
MIN's bonds payable had a fair value which was $30,000 higher than their carrying value.
The trademark had a useful life of exactly twenty years remaining from the date of acquisition.The bonds payable mature on January 1,2020.Both companies use straight line amortization exclusively.
The Financial Statements of both companies for the Year ended December 31,2009 are shown below: Other Information:
A goodwill impairment test conducted during August of 2009 revealed that the Min's goodwill amount on the date of acquisition was overstated by $5,000.
During 2008,Max sold $60,000 worth of Inventory to Min,80% of which was sold to outsiders during the year.During 2009,Max sold inventory to Min for $80,000.75% of this inventory was resold by Min to outside parties.
During 2008,Min sold $40,000 worth of Inventory to Max,80% of which was sold to outsiders during the year.During 2009,Min sold inventory to Max for $50,000.80% of this inventory was resold by Max to outside parties.
All intercompany sales as well as sales to outsiders are priced 25% above cost.The effective tax rate for both companies is 50%.
-Compute MAX's Goodwill at the Date of Acquisition.

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Definitions:

Climate Influence

The effect that the Earth's climate has on natural processes, ecosystems, and human societies.

Coastal Landscapes

Geographic areas where the land meets the ocean, characterized by features such as beaches, cliffs, and estuaries.

Precipitation

Any type of water, whether in liquid or solid state, that descends from the sky and makes contact with the Earth's surface, encompassing phenomena such as rain, snow, sleet, and hail.

Vegetation

Plant life or the lifeforms characteristic of a region, period, or special environment, playing key roles in the Earth's ecosystem.