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  3. on january 3, 2016, persoff corporation acquired a

On January 3, 2016, Persoff Corporation acquired all of the outstanding voting stock of Sea...

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Accounting

On January 3, 2016, Persoff Corporation acquired all of the outstanding voting stock of Sea Cliff, Inc. in exchange for $8,771,000 in cash. Persoff elected to exercise control over Sea Cliff as a wholly owned subsidiary with an independent accounting system. Both companies have December 31 fiscal year-ends. At the acquisition date, Sea Cliffs stockholders equity was $2,593,500 including retained earnings of $1,793,500.

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1.Determine the fair value in excess of book value for Persoff's acquisition date investment in Sea Cliff.

2.Determine Persoff's Equity earnings in Sea Cliff's balance for the year ened December 31, 2018.

3.Determine Persoff's December 31, 2018, Investment in Sea Cliff's balance.

4.Prepare a worksheet to determine the consolidated values to be reported on Persoffs financial statements.

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