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In: Accounting
Myka, Inc. acquired 15% of Pete Corporation on January 1, 2017, for $125,000 when the book...
Myka, Inc. acquired 15% of Pete Corporation on January 1, 2017, for $125,000 when the book value of Pete’s net assets was $950,000. During 2017, Pete reported net income of $530,000 and paid dividends of $40,000. On January 1, 2018, Myka purchased an additional 15% of Pete for $550,000. Any excess of cost over book value was attributable to goodwill (No amortization). On that same date, Myka changed to the equity method. During 2018, Pete reported net income of $730,000 and paid dividends of $90,000.
Required: What type and amount of income(s) did Myka record from Pete in 2017? Please show calculations so that partial credit can be granted. What type and amount of income(s) did Myka record from Pete in 2018? Please show calculations so that partial credit can be granted. What journal entry was made to convert to the equity method? What was the balance in the Equity Investment in Pete account at December 31, 2018? Please show calculations so that partial credit can be granted.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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