Herbert Inc. buys all of the outstanding stock of RambisCompany on January 1 200
September 17, 2022
Herbert Inc. buys all of the outstanding stock of RambisCompany on January 1 2003 for $574000. Annual excessamortization of $12000 results from this purchase transaction. Onthe date of the takeover Herbert reported retained earnings of$400000 while Rambis reported a $200000 balance. Herbert reportedinternal income of $40000 in 2003 and $50000 in 2004 and paid$10000 in dividends each year. Rambis reported net income of$20000 in 2003 and $30000 in 2004 and paid $5000 in dividendseach year. <
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