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EXERCISE 5-2 end of the Year of Acquisition Workpaper Entries LO 1 On January 1,...

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Accounting

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EXERCISE 5-2 end of the Year of Acquisition Workpaper Entries LO 1 On January 1, 2020, Payne Corporation purc A summary of Salmon Company's balan * 2020, Payne Corporation purchased a 75% interest in Salmon Company for $585,000. Salmon Company's balance sheet on that date revealed the following: Book Value Fair Value Equipment $525.000 $705,000 Other assets 150.000 150,000 $675,000 $855,000 Liabilities $ 75,000 $ 75,000 Common stock 225,000 Retained earnings 375,000 $675,000 The equipment had an original life of 15 years and has a remaining useful life of 10 years. Required: For the December 31, 2020, consolidated financial statements workpaper, prepare the workpaper entry to allocate and depreciate the difference between book value and the value implied by the purchase price assuming: A. Equipment is presented net of accumulated depreciation. 15. Accumulated depreciation is presented on a separate row in the work paper and in the consolidated statement of financial position

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