on January 1, 2019 Dotterel Corporation paid $200,000 cash for 40% of the voting common stock of
Question:
on January 1, 2019 Dotterel Corporation paid $200,000 cash for 40% of the voting common stock of Swamp Land Inc. Book value and fair value information for Swamp on this date is as follows: | ||||
Assets | Book Values | Fair Values | ||
Cash | $ 60,000 | $ 60,000 | ||
Accounts receivable | 120,000 | 120,000 | ||
Inventories | 80,000 | 100,000 | ||
Equipment | 340,000 | 400,000 | ||
$ 600,000 | $ 680,000 | |||
Liabilities & Equities | ||||
Accounts payable | $ 200,000 | $ 200,000 | ||
Note payable | 120,000 | 100,000 | ||
Capital stock | 200,000 | |||
Retained earnings | 80,000 | |||
$ 600,000 | $ 300,000 | |||
The investee reported 100,000 $ of earnings for 2019 but no dividends was declared. The inventory was sold during 2019, the equipment has 10 years useful life, notes payable due in 5 years.
A- The amount of the full good will acquisition date is:
22000
23000
48000
19200
B- The balance of Dotterel’s investment as on DEC 31,2019 is:
40000
182000
228000
28000
r
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni