Question 1 On January 2, Year 1 Parent Company paid $1,200,000 for 100% of the voting common stock o

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Question 1
On January 2, Year 1 Parent Company paid $1,200,000 for 100% of the voting common stock of Sub Corp. At the time of the investment, Sub Corp had net assets with a book value of $800,000 and fair value of $1,000,000. The fair value increase is attributable to the building and will be amortized over 10 years. During year 1, Sub earned net income of $100,000 and paid dividends of $20,000. Any excess cost over fair value is attributable to goodwill with an indefinite life.
1a-What is the amount of goodwill from Parent’s investment in Sub?
1b-What is the balance in the parent’s investment account at December 31, year 1?
1c-Provide the formulas for 1a & 1b

Question 2
On January 2, Year 1, Oscar Company paid $800,000 for 30% of the voting common stock of Felix Corp. At the time of the investment, Felix had net assets with a book value and fair value of $2,400,000. During year 1, Felix earned net income of $200,000 and paid dividends of $60,000. Any excess cost over book value is attributable to goodwill with an indefinite life.
2a-What is the amount of goodwill from Oscar’s Investment in Felix
2b-Based on the information provided for question 2 what is the balance in Oscar’s investment account at December 31, year 1?
2c-Provide the formulas for 1a & 1b

Question 3
On January 2, Year 1, Oscar Company paid $800,000 for 30% of the voting common stock of Felix Corp. At the time of the investment, Felix had net assets with a book value and fair value of $2,400,000. The building part of the net assets had a book value of $200,000 and a market value of 366,667. All other assets and liabilities have a book value that equals their markets value. During year 1, Felix earned net income of $200,000 ad paid dividends of $60,000. Any excess cost attributable to the building will be amortized over 10 years.
3a-What is the amount of goodwill from Oscar’s investment in Felix?
3b-Based on the information provided what is the balance in Oscar’s investment account at December 31, year 1?
3c-Provide formulas for 3a & 3b