On Jan 1, Aleksi Corp. purchased all outstanding shares of Sarrela Enterprises. The book value of Sarrelas
Question:
On Jan 1, Aleksi Corp. purchased all outstanding shares of Sarrela Enterprises. The book value of Sarrela’s assets and liabilities equaled their fair values except for apiece of land and a factory. On the date of acquisition, the land assessed market value was $88 while its value in Saarela’s books was $64. The factory, with a remaining life of 5 years, was undervalued in Saarela’s books by $23. Aleksi corp. uses the partial equity method in accounting for its acquisition of Saarela Enterprises for its own records. The book value of Aleksi’s investment in Saarela was $455 at the start of the year. Aleksi reported net income of $208 and declared dividends of $96 while Saarela earned $52 in net income and declared $12 in dividends for the year. What in Aleksi’s ending balance of its investment in Saarela for the year?
Advanced Accounting
ISBN: 978-0134472140
13th edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith