Question
In: Accounting
Saxton Corporation purchased 30 percent of Taylor Company’s voting stock on January 1, 2016, for $4...
Saxton Corporation purchased 30 percent of Taylor Company’s voting stock on January 1, 2016, for $4 million in cash. At the date of acquisition, Taylor reported its total assets at $80 million and its total liabilities at $74 million. Investigation revealed that Taylor’s plant and equipment (10-year life) was overvalued by $2 million and it had an unreported customer database (3-year life) valued at $700,000. Taylor declares and pays $150,000 in dividends and reports net income of $325,000 in 2019.
Required
Prepare the necessary journal entries on Saxton’s books to report
the above information for 2019 assuming Saxton uses the equity
method to report its investment.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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