Disclosures Following a Business Combination
On December 31, 2008, Large Company acquired Small Company for $100,000. This amount exceeded the recorded value of Small Company’s net assets by $20,000 on the acquisition date. The entire excess was attributable to a Small Company building that had a remaining useful life of 10 years as of the acquisition date. Information reported for the two companies for 2007 and 2008 was as follows:
|
|
2008 |
2007 |
|
Large Company: |
|
|
|
Revenue |
$700,000 |
$600,000 |
|
Net income |
50,000 |
40,000 |
|
Small Company: |
|
|
|
Revenue |
$ 50,000 |
$ 80,000 |
|
Net income |
8,000 |
15,000 |
Prepare the necessary pro forma information that would be included in the notes to Large Company’s 2008 financial statements. For simplicity, ignore income taxes.