On January 2,2014,pbl Enterprises Purchased 90% of Santos Incorporated Outstanding

Question 34

On January 2,2014,PBL Enterprises purchased 90% of Santos Incorporated outstanding common stock for $1,687,500 cash.Santos' net assets had a book value of $1,300,000 at the time.A building with a 15-year remaining life and a book value of $100,000 had a fair value of $175,000.Any other excess amount was attributed to goodwill.PBL reported net income for the first year of $350,000 (without regard for its ownership in Santos),while Santos had $175,000 in earnings. Required: 1.Calculate the amount of goodwill related to this acquisition as reported on the consolidated balance sheet at January 2,2014. 2.Calculate the amount of consolidated net income for the year ended December 31,2014. 3.What is the amount that will be assigned to the building on the consolidated balance sheet at the date of acquisition?