pin corporation paid 3 600 000 for a 90 percent interest in san corporation on janua 4372801

Pin Corporation paid $3,600,000 for a 90 percent interest in San Corporation on January 1, 2011; San’s total book value was $3,600,000. The excess was allocated as follows: $120,000 to undervalued equipment with a three-year remaining useful life and $280,000 to goodwill. The income statements of Pin and San for 2011 are summarized as follows (in thousands): Pin San Sales ……………………….. $8,000 …………… $3,200 Income from San ……………… 360 Cost of sales ………………. (4,000) …………… (1,600) Depreciation expense ……….. (800) ……………… (480) Other expenses …………… (1,600) ……………… (720) Net income ………………. $ 1,960 ……………… $ 400 REQUIRED 1. Calculate the goodwill that should appear in the consolidated balance sheet of Pin and Subsidiary at December 31, 2011. 2. Calculate consolidated net income for 2011. View Solution:
Pin Corporation paid 3 600 000 for a 90 percent interest in

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