On January 1, 2019, Yankees Corp. bought 30,000 shares of the available 100,000 common shares of...

  

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On January 1, 2019, Yankees Corp. bought 30,000 shares of the available 100,000 common shares of Red Sox Inc., a publicly-traded firm. This acquisition provided Yankees with significant influence. Yankees paid S 700,000 cash for the investment. At the time of the acquisition, Red Sox reported assets of $ 2,500,000 and liabilities of S 1,200,000. Asset values reflected fair market value, except for capital assets that had a net book value of $ 500,000 and a fair market value of S 730,000. These assets had a remaining useful life of five years. For 2019 Red Sox reported net income of $ 350,000 and paid total cash dividends of S 122,500. I Instructions a) Assuming Yankees is using IFRS, did the initial investment include a payment for goodwill? Provide support for your answer. (8 marks) b) At the end of 2019, what would appear on the income statement and statement of financial position of Yankees in On January 1, 2019, Yankees Corp. bought 30,000 shares of the available 100,000 common shares of Red Sox Inc., a publicly-traded firm. This acquisition provided Yankees with significant influence. Yankees paid S 700,000 cash for the investment. At the time of the acquisition, Red Sox reported assets of $ 2,500,000 and liabilities of S 1,200,000. Asset values reflected fair market value, except for capital assets that had a net book value of $ 500,000 and a fair market value of S 730,000. These assets had a remaining useful life of five years. For 2019 Red Sox reported net income of $ 350,000 and paid total cash dividends of S 122,500. I Instructions a) Assuming Yankees is using IFRS, did the initial investment include a payment for goodwill? Provide support for your answer. (8 marks) b) At the end of 2019, what would appear on the income statement and statement of financial position of Yankees in

Answer rating: 100% (QA)

Solution X on January 1 2019 Yankees corp bought 30000 Tot al sales lo00 00 Y 1quistiom 300 Net ... View the full answer