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Category > Business & Finance Posted 02 Aug 2017 My Price 12.00

On January 3, 2011, Austin Corp.

On January 3, 2011, Austin Corp. purchased 25% of the voting common stock of Gainsville Co., paying $2,500,000. Austin decided to use the equity method to account for this investment. At the time of the investment, Gainsville's total stockholders' equity was $8,000,000. Austin gathered the following information about Gainsville's assets and liabilities
Book Value Fair Value 
Buildings (10 year life) $ 400,000 $ 500,000 
Equipment (5 year life) $ 1,000,000 $ 1,300,000
Franchises (8 year life) $ - $ 400,000 
For all other assets and liabilities, book value and fair value were equal. Any excess of cost over fair value was attributed to goodwill, which has not been impaired.
a) What is the amount of goodwill associated with the investment?
b) For 2011, what is the total amount of excess amortization for Austin's 25% investment in Gainsville?

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Status NEW Posted 02 Aug 2017 05:08 PM My Price 12.00

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