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On January $1,2024,$ Morey, Incorporated, exchanged $$180,025$ for $25$ percent of Amsterdam Corporation. Morey appropriately applied the equity method to this investment. At January $1,$ the book values of Amsterdam$$s assets and liabilities approximated their fair values.

On June $30,2024,$ Morey paid $$567,000$ for an additional $70$ percent of Amsterdam, thus increasing its overall ownership to $95$ percent. The price paid for the $70$ percent acquisition was proportionate to Amsterdam$$s total fair value. At June $30,$ the carrying amounts of Amsterdam$$s assets and liabilities approximated their fair values. Any remaining excess fair value was attributed to goodwill.

Amsterdam reports the following amounts at December $31,2024($credit balances shown in parentheses$)$:

Revenues $ $(294,000)$

Expenses $219,000$

Retained earnings, January $1(195,700)$

Dividends declared, October $130,000$

Common stock $(500,000)$

Amsterdam$$s revenue and expenses were distributed evenly throughout the year, and no changes in Amsterdam$$s stock have occurred.

Required:

Using the acquisition method, compute the following:

The acquisition$-$date fair value of Amsterdam to be included in Morey's June $30$ consolidated financial statements.

The revaluation gain $($or loss$)$ reported by Morey for its $25$ percent investment in Amsterdam on June $30.$

The amount of goodwill recognized by Morey on its December $31$ balance sheet $($assume no impairments have been recognized$).$

The noncontrolling interest amount reported by Morey on its June $30$ and December $31$ consolidated balance sheet.

Prev Question $5$ of $8$ Total $5$ of $8$ Visit question mapNext McGraw HillOn January $1,2024,$ Morey, Incorporated, exchanged $$180,025$ for $25$ percent of Amsterdam Corporation. Morey appropriately applied

the equity method to this investment. At January $1,$ the book values of Amsterdam's assets and liabilities approximated their fair values.

On June $30,2024,$ Morey paid $$567,000$ for an additional $70$ percent of Amsterdam, thus increasing its overall ownership to $95$

percent. The price paid for the $70$ percent acquisition was proportionate to Amsterdam's total fair value. At June $30,$ the carrying

amounts of Amsterdam's assets and liabilities approximated their fair values. Any remaining excess fair value was attributed to

goodwill.

Amsterdam reports the following amounts at December $31,2024($credit balances shown in parentheses$)$:

Amsterdam's revenue and expenses were distributed evenly throughout the year, and no changes in Amsterdam's stock have

occurred.

Required:

Using the acquisition method, compute the following:

a$.$ The acquisition$-$date fair value of Amsterdam to be included in Morey's June $30$ consolidated financial statements.

b$.$ The revaluation gain $($or loss$)$ reported by Morey for its $25$ percent investment in Amsterdam on June $30.$

c$.$ The amount of goodwill recognized by Morey on its December $31$ balance sheet $($assume no impairments have been recognized$).$

d$.$ The noncontrolling interest amount reported by Morey on its June $30$ and December $31$ consolidated balance sheet.

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