Eagle Company acquires 25% of the voting stock of Frank Corporation for $4,000,000 on January 1, 2010.At the time, the book value of the company was $16,000,000.During 2010Frank reported net income of $1,500,000 and paid dividends of $200,000.Both companies have December 31 year-ends.

Now assume Frank’s book value at the date of acquisition was $10,000,000, and the excess paid over book value is attributed to previously unrecorded intangibles with an estimated remaining life of 10 years. Straight-line amortization is appropriate. What amount will Eagle report as equity in net income of Frank for 2010?

Answer rating: 100% (QA)

Franks book value at the date of acquisition was 10000000 The excess paid over bo... View the full answer