1.
1. Prepare a determination and distribution of excess schedule for the investment.
2. The trial balances of Chicago Company and its subsidiary, Naperville Inc. are as fol- lows on
December 31,20X3: Chicago Co Naperville, Inc $ 530,000 1,805,000 (405,000) 460,000
(900,000) (220,000) $130,000 440,000 (70,000) Current assets Depreciable fixed assets
Accumulated depreciation Investment in Naperville, Inc Liabilities Common stock ($1 par)
Common stock ($5 par) Paid-in-Capital in excess of par Retained earnings, January 1, 20X3
Revenues Expenses Dividends declared (225,000) (1,040,000) (230,000) (460,000) 450,000
10,000 (50,000) (15,000) (170,000) (210,000) 170,000 Totals
Solution
1)
company implied fair value
parent price(100
%)
NCI(0%)
Fair value of subsiduary
460,000Â Â Â Â
[23*20000]
less:Book value of interest acquired
common stock(5 par) 50,000
Paid in capital in excess of par 15,000
Reatined earnings 135,000
Total equity 200,000
Interest acquired 100% -
book value 200,000 [ 200,000*100%]
Excess of fair value over book
value
260,000 260,000