Turner pays $4,500,000 to acquire 80% of Stone on December 31, 2013. At that date, Stone has net assets with a book value of $2,400,000. The fair value of Stone's assets and liabilities all equaled their book values with the exception of Stone's Equipment, which has a remaining useful life of 10 years and a book value of $900,000.
Turner does not have sufficient time to complete an appraisal on Stone's Equipment before issuing its full year 2013 financial statements , but estimates that the fair value of Stone's Equipment was $700,000 on acquisition date. On October 1, 2014, Turner receives the result of an independent appraisal that indicates that the Equipment actually had a fair value of $500,000 at December 31, 2013.
Answer the following questions;
1. Indicate the codification section(s) you used to research your response in the form of ###-##-##-## (for each paragraph used). Cut and paste the FASB Codification section paragraph(s) and either underline or use highlighter pen to indicate the portion of the codification paragraph(s) that you used to support your response.
2. How much total goodwill was recorded by Turnerat:
a. December 31, 2013 when Turner originally issued its 2013 full year financial statements(show a computation)
b. December 31, 2014 when Turner issues its financial statements for the full year 2014 (show a computation and assume no impairment in goodwill)
3. On a consolidation worksheet for December 31 2014, prepare worksheet entry "E" (show a computation for the amount).