On January 1, 2009, (A) Co. acquired all of the common stock of (B) Corp. For...

 

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On January 1, 2009, (A) Co. acquired all of the common stock of (B) Corp. For 2009, (B) earned net income of JD 360,000 and paid dividends of JD 190,000. Amortization of the patent allocation that was included in the acquisition was JD 6,000. 1. How much difference would there have been in (B)'s income with regard to the effect of the investment, between using the equity method or using the cost value method? 2. How much difference would there have been in (A)'s income with regard to the effect of the investment, between using the equity method or using the partial equity method ? On January 1, 2009, (A) Co. acquired all of the common stock of (B) Corp. For 2009, (B) earned net income of JD 360,000 and paid dividends of JD 190,000. Amortization of the patent allocation that was included in the acquisition was JD 6,000. 1. How much difference would there have been in (B)'s income with regard to the effect of the investment, between using the equity method or using the cost value method? 2. How much difference would there have been in (A)'s income with regard to the effect of the investment, between using the equity method or using the partial equity method ?

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1 First calculating bs income to be adjusted in As investment as per equity method Adju... View the full answer