Book value:
Book value of the asset is found out after deducting
The fair value of the asset:
The fair value of the asset is the amount at which two parties may enter into an agreement with open hand.
To Identify:
Whether there is excess of cost over book value and provide the accounting treatment.
Explanation of Solution
Compute excess of cost over book value:
Thus, the excess of the cost price over book value will be debited to
Working note 1:
Compute the share of parent in total equity:
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Chapter 7 Solutions
Advanced Accounting
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- Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning