In January 2023, Domingo, Inc., acquired 20 percent of the outstanding common stock of Martes, Inc., for

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In January 2023, Domingo, Inc., acquired 20 percent of the outstanding common stock of Martes, Inc., for $700,000. This investment gave Domingo the ability to exercise significant influence over Martes, whose balance sheet on that date showed total assets of $3,900,000 with liabilities of $900,000. Any excess of cost over book value of the investment was attributed to a patent having a remaining useful life of 10 years.

In 2023, Martes reported net income of $170,000. In 2024, Martes reported net income of $210,000. Dividends of $70,000 were declared in each of these two years. What is the equity method balance of Domingo’s Investment in Martes, Inc., at December 31, 2024?
a. $728,000
b. $748,000
c. $756,000
d. $776,000

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Advanced Accounting

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Authors: Joe Ben Hoyle, Thomas Schaefer And Timothy Doupnik

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Question Posted: Jun 14, 2023 08:54 AM

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In January 2023, Domingo, Inc., acquired 20 percent of the outstanding common stock of Martes, Inc., for

Question:

Step by Step Answer:

A Acquisition price Income accruals 2023170000 2024 210000 Amortization see below 20...View the full answer

Advanced Accounting

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