On 1/1/2016, Wilson buys 25% of Taylormade for $500,000 and accounts for the investment using the equity method. The carrying value of net assets at date of purchase totaled $1,800,000. Fair value and the carrying values of the acquired assets were same except for a factory with a 10 year useful life, which exceeded its carrying value by $150,000 and inventory which exceeded its carrying value by $50,000. The inventory was sold during 2016. (That is the fair value of Taylormade’s net assets were $2,000,000). During 2016, Taylormade reports net income of $200,000 and paid $40,000 cash dividend. What amount should Wilson report as the carrying amount for its investment in Taylormade at December 31 st 

, 2016.

 

a.

 

$595,000

 

b.

 

$532,000

 

c.

 

$493,750

 

d.

 

$523,750

Answer rating: 100% (QA)

SOLUTION To calculate the carrying amount of Wilsons investment in Taylormade at December 31 2016 we ... View the full answer