On January 1, 2020, Beyonce Co. purchased 25,000 shares (a 10% interest) in Elton John Corp. for

Question:

On January 1, 2020, Beyonce Co. purchased 25,000 shares (a 10% interest) in Elton John Corp. for $1,400,000. At the time, the book value and the fair value of John?s net assets were $13,000,000.

On July 1, 2021, Beyonce paid $3,040,000 for 50,000 additional shares of John common stock, which represented a 20% investment in John. As a result of this transaction, Beyonce owns 30% of John and can exercise significant influence over John?s operating and financial policies.

John reported the following net income and declared and paid the following dividends.

image

Instructions

Determine the ending balance that Beyonce Co. should report as its investment in John Corp. at the end of 2021.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 978-1119503668

17th edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel

Question Posted: