Matrix, Inc acquired 25% of Neo Enterprises for $2,000,000 on January 1, 2011. The fair value...

 

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Matrix, Inc acquired 25% of Neo Enterprises for $2,000,000 on January 1, 2011. The fair value and book value of 25% of Neo's identifiable net assets was $2.000,000 and $1,600,000 on that date, and the difference was attributable to assets that would be depreciated over 1o years. During 2011 Neo recognized net income of $500.000 and paid dividends of $400,000. Neo had a total fair value of $10,000,000 as of December 31, 2011. Required: Prepare the journal entries necessary in 2011 to account for the Neo investment, assuming that Fredo accounts for that investment as an equity method investment. 28. Purchase 29. Net Income adjustment 30. Dividend adjustment Matrix, Inc acquired 25% of Neo Enterprises for $2,000,000 on January 1, 2011. The fair value and book value of 25% of Neo's identifiable net assets was $2.000,000 and $1,600,000 on that date, and the difference was attributable to assets that would be depreciated over 1o years. During 2011 Neo recognized net income of $500.000 and paid dividends of $400,000. Neo had a total fair value of $10,000,000 as of December 31, 2011. Required: Prepare the journal entries necessary in 2011 to account for the Neo investment, assuming that Fredo accounts for that investment as an equity method investment. 28. Purchase 29. Net Income adjustment 30. Dividend adjustment

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1 Investment in Neo 2000000 Cash 2000000 Cash 25400000 100000 Investment in Ne... View the full answer