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  1. business
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  3. company p purchased an 80% interest in company s o

Company P purchased an 80% interest in Company S on January 1, 20X3, for $800,000....

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Accounting

Company P purchased an 80% interest in Company S on January 1, 20X3, for $800,000. On the purchase date, Company S stockholders' equity was $800,000. Any excess of fair value over book value was attributed to a patent with a 10-year remaining life. In 20X3, Company P reported internally generated net income before taxes of $150,000. Company S reported a net income before taxes of $70,000. The firms file a consolidated tax return at a 30% tax rate. The nondeductible portion of excess amortization is

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