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On January 1,2023, Pulaski, Incorporated, acquired a 60 percent interest in the common stock of...

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Accounting

On January 1,2023, Pulaski, Incorporated, acquired a 60 percent interest in the common stock of Sheridan, Incorporated, for $412,800. Sheridan's book value on that date consisted of common stock of $100,000 and retained earnings of $244,000. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $275,200. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $85,000 and also had unpatented technology (15-year estimated remaining life) undervalued by $61,200. Any remaining excess acquisition-date fair value was assigned to an indefinite-lived trade name. Since acquisition, Pulaski has applied the equity method to its Investment in Sheridan account. At year-end, there are no intra-entity payables or receivables.
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