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 2 years 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...
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Tuecke Concrete acquired 20% of the outstanding common stock of Drew, Inc. on January 1,2012, by...
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for
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cash dividend on June 30 and again on December 31, 2012.
Drew
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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
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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...
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