On January 1, Year 1, Hunt Ltd. invested $400,000 in cash for a40 percent interest in Fish Inc. As a part of the investment, Hunt and the other shareholder in Fish signed an agreement under which the two shareholders had joint control over Fish. The acquisition differential on Hunt’s 40 percent investment was $60,000. It pertained entirely to one of Fish’s patents, which had a remaining useful life of six years at the date of the investment by Hunt. During Year 1, Fish reported net income of $180,000 and paid dividends of $100,000. Hunt reports its investment in Fish using the equity method.

What amount would Hunt report on its statement of financial position for investment in Fish at December 31, Year 1?

A. $411,000

B. $422,000

C. $441,000

D. $451,000

Answer rating: 100% (QA)

Amount paid for acquisition 400000 Add Shares ... View the full answer