Equity Method (P32) O Jan 1, Payne purchase 30% of sloan for $2,000 cash and issues common stock with a fair value of $3, 000 and par value of $2,000. Payne also pays $50 to register the securities and 100 in consulting fees. Investment in Sloan 5.000 Cash 2.000 Common stock. at par 2.000 Additional paid in capit 000 Additional paid in capital 50 Investment expense 100 Cash 150
2-16 Equity Method (P32) Jan. 1, Payne purchase 30% of Sloan for $2,000 cash and issues common stock with a fair value of $3,000 and par value of $2,000. Payne also pays $50 to register the securities and $100 in consulting fees. Investment in Sloan 5,000 Cash 2,000 Common stock, at par 2,000 Additional paid in capital 1,000 Additional paid in capital 50 Investment expense 100 Cash 150
Cost/Book Value Assignment Cost of acquisition s5,000 Less 30% book value=30%0(12, 000 3,600 Excess of cost over book value sl,400 Assigned to: Amount Inventories 1,000 Other current assets 200 equipment 3.000 Note payable: -200 Total assigned to identifiable na 4,000 30 200 Goodwil 200 2-17
2-17 Cost/Book Value Assignment Cost of acquisition $5,000 Less 30% book value = 30%(12,000) 3,600 Excess of cost over book value $1,400 Assigned to: Amount Inventories ： $1,000 Other current assets : -200 Equipment : 3,000 Note payable: -200 Total assigned to identifiable NA $4,000 *30% 1,200 Goodwill 200