Fox Ltd. invested 51 million in Gloven Corp. early in the current year, receiving 25% of its outstanding shares. At the time of the purchase, Gloven Corp. had a carrying amount of $3.2 million. Gloven Corp. pays out 35% of its net income in dividends each year. Assume that Fox Ltd. applies !FRS and that the 25% holding of Gloven shares is sufficient to enable Fox to significantly influence the operating, investing, and financing decisions of Gloven.
Use the information in the following T account for the investment in Gloven to answer the following questions:
(a) How much was Fox Ltd.'s share ofGloven Corp.’s net income for the year?
(b) How much was Fox Ltd.'s share ofGloven Corp.’s dividends for the year?
(c) How much was Fox Ltd.'s annual depreciation of the excess payment for capital assets?
(d) What was Gloven Corp.'s total net income for the year?
(e) What were Gloven Corp.'s total dividends for the year?
(f) Assuming that depreciable assets had a remaining useful life of 10 years when Fox acquired its investment in Gloven, how much of the payment in excess of carrying amount was assigned to goodwill?

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