32. (Asks about several consolidated balances and consolidation process.

Includes the different accounting methods to record investment.)

a. Schedule 1Fair Value Allocation and Excess Amortizations

Consideration transferred by Miller ......... $664,000

Noncontrolling interest fair value ............. 166,000
Taylors fair value ....................................... $830,000
Taylors book value .................................... (600,000)
Fair value in excess of book value .......... 230,000
life amortizations
Excess fair value assigned to buildings 80,000
20 years $4,000
Goodwill ..................................................... $150,000 indefinite -0-
Total ....................................................... $4,000

b. $150,000 (see schedule 1 above)

c. Entry (S)
Common stock (Taylor) ...................................... 300,000
Additional paid-in capital (Taylor) ..................... 90,000
Retained earnings (Taylor) ................................. 210,000
Investment in Taylor Company (80%) .......... 480,000
Noncontrolling interest in Taylor (20%) ....... 120,000

Entry (A)
Buildings .............................................................. 80,000
Goodwill ............................................................... 150,000
Investment in Taylor Company (80%) .......... 184,000
Noncontrolling interest in Taylor (20%) ....... 46,000

d. (1) Equity method

Income accrual (80%) ........................................... $56,000
Excess amortization expense .............................. (3,200)
Investment income .......................................... $52,800

e. (1) Equity method

Initial fair value paid .............................................. $664,000
Income accrual 20132015 ($260,000 80%) ..... 208,000
Dividends 20132015 ($45,000 80%) ................ (36,000)
Excess amortizations 20132015 ($3,200 3) .... (9,600)
Investment in Taylor12/31/15 ...................... $826,400
f. Using the acquisition method, the allocation will be the total
difference ($80,000) between the buildings' book value and fair value.
Based on a 20 year remaining life, annual excess amortization is
$4,000.

Miller book valuebuildings ......................................... $800,000

Taylor book valuebuildings ....................................... 300,000
Allocation ........................................................................ 80,000
Excess amortizations for 20132014 ($4,000 2) ........ (8,000)
Consolidated buildings account ............................. $1,172,000

g. Acquisition-date fair value allocated to goodwill

(see schedule 1 above) ............................................ $150,000

h. If the parent has been applying the equity method, the stockholders'
equity accounts on its books will already represent consolidated
totals. The common stock and additional paid-in capital figures to be
reported are the parent balances only. As to retained earnings, the
equity method will properly record all subsidiary net income and
amortization so that the parent balance is also a reflection of the
consolidated total.