Figure: on 4/1/09, Sey Mold Corporation Acquired 100% of DotDot.Com for for $2,000,000

question 10

Essay

Figure:
On 4/1/09, 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 12/31/13.

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Definitions:

Payments

The act of transferring money in exchange for goods or services.

Future Payments

Payments that are scheduled to be made at a later date or period, often related to loans or financing arrangements.

Investment Privately

Allocating financial resources into private enterprises not listed on public stock exchanges.

Maximum Price

The highest price a buyer is willing to pay for a good, service, or financial instrument.