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Solution P3-141 Schedule to allocate the investment cost-book value differential:Investment cost January 2, 2003 $2,760,000Book value of interest acquired ($2,300,000 x 80%) (1,840,000) Excess cost over book value acquired $ 920,000Excess allocated: Interest Fair Value - Book Value x Acquired = AllocatedInventories $ 500,000 $ 400,000 80% $ 80,000Other current assets 200,000 150,000 80% 40,000Land 600,000 500,000 80% 80,000Buildings-net 1,800,000 1,000,000 80% 640,000Equipment-net 600,000 800,000 80% (160,000)Other liabilities 560,000 610,000 80% 40,000Remainder to goodwill 200,000 Excess cost over book value acquired $920,000Goodwill check: Investment cost $2,760,000 - Fair value acquired ($3,200,000 x 80%) = Goodwill $200,000
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