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Dye Corporation purchaesd all of Ventura Company's common stock on January 1, 2017, for $2,000,000 cash....

Dye Corporation purchaesd all of Ventura Company's common stock on January 1, 2017, for $2,000,000 cash. The investee's stockholder's equity amounted to 1,600,000. The excess of $400,000 was due to an unrecorded patent with an eight- year life. In 2017, Ventura reported net income of $320,000 and paid dividends of $50,000.

What is the equity investment balance at December 2017 ?

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Expert Solution

Investment amount 2000000
Add:net income 270000
Less:dividends 50000
Investment balance 2220000
Net Income 320000
Amortization 50000
(400000/8)
Equity Income 270000

ekkarill92 answered 2 years ago
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