Question
In: Accounting
In January 2017, Domingo, Inc., acquired 20 percent of the outstanding common stock of Martes, Inc.,...
In January 2017, Domingo, Inc., acquired 20 percent of the outstanding common stock of Martes, Inc., for $761,000. This investment gave Domingo the ability to exercise significant influence over Martes, whose balance sheet on that date showed total assets of $4,095,000 with liabilities of $935,000. Any excess of cost over book value of the investment was attributed to a patent having a remaining useful life of 10 years.
In 2017, Martes reported net income of $232,000. In 2018, Martes reported net income of $285,500. Dividends of $96,000 were declared in each of these two years. What is the equity method balance of Domingo’s Investment in Martes, Inc., at December 31, 2018?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
In January 2014, Domingo, Inc., acquired 20 percent of the outstanding common stock of Martes, Inc.,...
In January 2014, Domingo, Inc., acquired 20 percent of the
outstanding common stock of Martes, Inc., for $700,000. Martes’s
assets on that date were recorded at $3,900,000 with liabilities of
$900,000. Any excess of cost over book value of the investment was
attributed to a patent having a remaining useful life of 10
years.
In 2014, Martes reported net income of $170,000. In 2015, Martes
reported net income of $210,000. Dividends of $70,000 were declared
in each of these two...
Heidebrecht Design acquired 20% of the outstanding common stock of Quayle Company on January 1, 2017,
Heidebrecht Design acquired 20% of the outstanding common stock of Quayle Company on January 1, 2017, by paying $800,000 for the 30,000 shares. Quayle declared and paid $0.30 per share cash dividends on March 15, June 15, September 15, and December 15, 2017. Quayle reported net income of $320,000 for the year. At December 31, 2017, the market price of Quayle common stock was $34 per share.
Instructions
(a) Prepare the journal entries for Heidebrecht Design for 2017 assuming...
Tuecke Concrete acquired 20% of the outstanding common stock of Drew, Inc. on January 1,2012, by...
Tuecke Concrete acquired 20% of the outstanding common
stock of Drew, Inc. on January 1,2012, by paying $1,100,000
for
40,000 shares. Drew declared and paid a $0.50 per share
cash dividend on June 30 and again on December 31, 2012.
Drew
reported a net income of $600,000 for the year. On
December 31, 2012, the market price of Drew's common stock was $30
per share.
Instructions
(a) Prepare the journal entries for Tuecke's Concrete
for 2012, assuming Tuecke cannot exercise...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent interest in the common stock of...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent
interest in the common stock of Stinson, Inc., for $348,000.
Stinson's book value on that date consisted of common stock of
$100,000 and retained earnings of $205,800. Also, the
acquisition-date fair value of the 40 percent noncontrolling
interest was $232,000. The subsidiary held patents (with a 10-year
remaining life) that were undervalued within the company's
accounting records by $52,300 and an unrecorded customer list
(15-year remaining life) assessed at a...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent interest in the common stock of...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent
interest in the common stock of Stinson, Inc., for $362,400.
Stinson's book value on that date consisted of common stock of
$100,000 and retained earnings of $214,200. Also, the
acquisition-date fair value of the 40 percent noncontrolling
interest was $241,600. The subsidiary held patents (with a 10-year
remaining life) that were undervalued within the company's
accounting records by $82,600 and an unrecorded customer list
(15-year remaining life) assessed at a...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent interest in the common stock of...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent
interest in the common stock of Stinson, Inc., for $346,200.
Stinson's book value on that date consisted of common stock of
$100,000 and retained earnings of $204,600. Also, the
acquisition-date fair value of the 40 percent noncontrolling
interest was $230,800. The subsidiary held patents (with a 10-year
remaining life) that were undervalued within the company's
accounting records by $79,900 and an unrecorded customer list
(15-year remaining life) assessed at a...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent interest in the common stock of...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent
interest in the common stock of Stinson, Inc., for $351,600.
Stinson's book value on that date consisted of common stock of
$100,000 and retained earnings of $207,900. Also, the
acquisition-date fair value of the 40 percent noncontrolling
interest was $234,400. The subsidiary held patents (with a 10-year
remaining life) that were undervalued within the company's
accounting records by $88,600 and an unrecorded customer list
(15-year remaining life) assessed at a...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent interest in the common stock of...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent
interest in the common stock of Stinson, Inc., for $372,000.
Stinson's book value on that date consisted of common stock of
$100,000 and retained earnings of $220,000. Also, the
acquisition-date fair value of the 40 percent noncontrolling
interest was $248,000. The subsidiary held patents (with a 10-year
remaining life) that were undervalued within the company's
accounting records by $70,000 and an unrecorded customer list
(15-year remaining life) assessed at a...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent interest in the common stock of...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent
interest in the common stock of Stinson, Inc., for $378,000.
Stinson's book value on that date consisted of common stock of
$100,000 and retained earnings of $223,400. Also, the
acquisition-date fair value of the 40 percent noncontrolling
interest was $252,000. The subsidiary held patents (with a 10-year
remaining life) that were undervalued within the company's
accounting records by $80,800 and an unrecorded customer list
(15-year remaining life) assessed at a...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent interest in the common stock of...
On January 1, 2017, McIlroy, Inc., acquired a 60 percent
interest in the common stock of Stinson, Inc., for $392,400.
Stinson's book value on that date consisted of common stock of
$100,000 and retained earnings of $231,900. Also, the
acquisition-date fair value of the 40 percent noncontrolling
interest was $261,600. The subsidiary held patents (with a 10-year
remaining life) that were undervalued within the company's
accounting records by $81,700 and an unrecorded customer list
(15-year remaining life) assessed at a...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Sam, whose mass is 75kg , takes off across level snow on his jet-powered skis. The...
- How do you calculate the time required to change the temperature of a room by 10C...
- You are evaluating a project with a 4 year life. Sales revenue is projected to be...
- Transforming Luxury Distribution in Asia: Bluebell's Makeover in the Face of Digital Disruption :Question: 1) Who...
- Describe the potential advantages and disadvantages of incorporating additional explanatory variables in a multiple regression model.
- Write a brief case study on an ABO discrepency.
- Follow up question to the recommendations made to Jerry , how do I get to $44.96?...
ADVERTISEMENT