Peregrine Corporation acquired an 80% interest in Serine Corporation in 2011 at a time when Serine's book
Question:
On January 1, 2014, Serine sold a truck with a $55,000 book value to Peregrine for $100,000. Peregrine is depreciating the truck over 10 years using the straight-line method. The truck has no salvage value. Separate incomes for Peregrine and Serine for 2014 were as follows:
Peregrine Serine
Sales $1,800,000 $1,050,000
Gain on sale of truck 45,000
Cost of Goods Sold (750,000) (285,000)
Depreciation expense (450,000) (135,000)
Other expenses (180,000) (450,000)
Separate incomes $ 420,000 $ 225,000
Peregrine's investment income from Serine for 2014 was
A) $108,000.
B) $144,000.
C) $147,600.
D) $180,000.
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For
Advanced Accounting
ISBN: 978-0134472140
13th edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
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