Question 1 On January 1, 2011, john doe enterprises (JDE) acquired a 55% interest in bubba manufacturing inc.(BMI).

Question 1On January 1, 2011, john doe enterprises (JDE) acquired a 55% interest in bubba manufacturing inc.(BMI). JDE paid for the transaction with $7 million cash and 500,000 shares of JDE common stock (no par value, market value : $14.90 per share). At the time of the acquisition, BMI’s book value (stockholder’s equity) was $16970,000. Differences between book value and fair value for BMI on January 1, 2011 are indicated below: