On January 1, 2019, Ace Ltd. purchased 35% of Bruin Co's common shares. The book value...

 

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On January 1, 2019, Ace Ltd. purchased 35% of Bruin Co's common shares. The book value of Bruin's net assets approximated fair value at this date. Goodwill on the acquisition related to Ace's interest was $75,000. Ace appropriately accounts for this investment using the equity method and the balance in Ace's investment account was $515,000 as at December 31, 2019. Bruin reported net income of $180,000 for the year ended December 31, 2019, and paid dividends on common shares totaling $40,000 during 2019. Assume there were no intercompany transactions during the year. Which of the following is the amount that Ace paid for its 35% investment in the common shares of Bruin? (2 marks) $466,000 $515,000 $492,000 $375,000 None of the answers are correct On January 1, 2019, Ace Ltd. purchased 35% of Bruin Co's common shares. The book value of Bruin's net assets approximated fair value at this date. Goodwill on the acquisition related to Ace's interest was $75,000. Ace appropriately accounts for this investment using the equity method and the balance in Ace's investment account was $515,000 as at December 31, 2019. Bruin reported net income of $180,000 for the year ended December 31, 2019, and paid dividends on common shares totaling $40,000 during 2019. Assume there were no intercompany transactions during the year. Which of the following is the amount that Ace paid for its 35% investment in the common shares of Bruin? (2 marks) $466,000 $515,000 $492,000 $375,000 None of the answers are correct

Answer rating: 100% (QA)

Answer 466000 Explanation Investment in Equity Securities 20 to 49 or with significant influence Inv... View the full answer