On January 1, 2020, Squeak Inc. paid $900,000 to purchase 30% of Pip Inc.'s outstanding voting...

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On January 1, 2020, Squeak Inc. paid $900,000 to purchase 30% of Pip Inc.'s outstanding voting shares. On the date of acquisition, Pip's net assets were valued at $3,900,000. The full purchase price discrepancy was allocated to Plant & Equipment, which had a remaining useful life of 10 years. Pip's earned $150,000 in both 2020 and 2021. Pip paid dividends of $20,000 and $10,000 during 2020 and 2021, respectively. Pip declared dividends of $10,000 and $10,000 during 2020 and 2021, respectively. Squeak Inc. has significant influence over Pip Inc. and uses the equity method. Required: Calculate the balance in Squeak's Investment in Pip account as at December 31, 2021. (2 marks) On January 1, 2020, Squeak Inc. paid $900,000 to purchase 30% of Pip Inc.'s outstanding voting shares. On the date of acquisition, Pip's net assets were valued at $3,900,000. The full purchase price discrepancy was allocated to Plant & Equipment, which had a remaining useful life of 10 years. Pip's earned $150,000 in both 2020 and 2021. Pip paid dividends of $20,000 and $10,000 during 2020 and 2021, respectively. Pip declared dividends of $10,000 and $10,000 during 2020 and 2021, respectively. Squeak Inc. has significant influence over Pip Inc. and uses the equity method. Required: Calculate the balance in Squeak's Investment in Pip account as at December 31, 2021. (2 marks)

Answer rating: 100% (QA)

To calculate the balance in Squeaks Investment in Pip account as of December 31 2021 we need to use ... View the full answer