On January 1 , 2 0 2 3 , Ridge Road Company acquired 3 0 percent of
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Question:
On January Ridge Road Company acquired percent of the voting shares of Sauk Trail, Incorporated, for $ in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trails board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trails board, which gave it the ability to significantly influence Sauk Trails operating and investing activities.
The January carrying amounts and corresponding fair values for Sauk Trails assets and liabilities follow:
Assets and Liabilities Carrying Amount Fair Value
Cash and Receivables $ $
Computing Equipment
Patented Technology
Trademark
Liabilities
Also, as of January Sauk Trails computing equipment had a sevenyear remaining estimated useful life. The patented technology was estimated to have a threeyear remaining useful life. The trademark's useful life was considered indefinite. Ridge Road attributed to goodwill any unidentified excess cost.
During the next two years, Sauk Trail reported the following net income and dividends:
Years Net Income Dividends Declared
$ $
Required:
How much of Ridge Roads $ payment for Sauk Trail is attributable to goodwill?
What amount should Ridge Road report for its equity in Sauk Trails earnings on its income statements for and
What amount should Ridge Road report for its investment in Sauk Trail on its balance sheets at the end of and
Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
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