On January 1, 2020, Ridge Road Company acquired 20 percent of the voting shares of Sauk...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 1, 2020, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc., for $2,900,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail's board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail's board, which gave it the ability to significantly influence Sauk Trail's operating and investing activities. The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail's assets and liabilities follow: Carrying Amount 120,000 5,090,000 110,000 Fair Value 120,000 5,860,000 4,020,000 160,000 (195,000) 2,020,000 (195,000) Cash and receivables Computing equipment Patented technology Trademark Liabilities Also, as of January 1, 2020, Sauk Trail's computing equipment had a seven-year remaining estimated useful life. The patented technology was estimated to have a four-year remaining useful life. The trademark's useful life was considered indefinite. Ridge Road attributed to goodwill any unidentified excess cost. During the next two years. Sauk Trail reported the following net income and dividends: Dividends Declared 2828 2821 Net Income $ 1,820,000 2,095,000 $ $ 160,000 170,000 a. How much of Ridge Road's $2,900,000 payment for Sauk Trail is attributable to goodwill? b. What amount should Ridge Road report for its equity in Sauk Trail's earnings on its income statements for 2020 and 2021? c. What amount should Ridge Road report for its investment in Sauk Trail on its balance sheets at the end of 2020 and 2021? Req A Complete this question by entering your answers in the tabs below. Goodwill Req B and C How much of Ridge Road's $2,900,000 payment for Sauk Trail is attributable to goodwill? < Req A Req B and C > Reg A Req B and C b. What amount should Ridge Road report for its equity in Sauk Trail's earnings on its income statements for 2020 and 2021? c. What amount should Ridge Road report for its investment in Sauk Trail on its balance sheets at the end of 2020 and 2021? 2020 Equity in Sauk Trail's earnings b. C. Investment in Sauk Trail < Req A 2021 Req Band C > On January 1, 2020, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc., for $2,900,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail's board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail's board, which gave it the ability to significantly influence Sauk Trail's operating and investing activities. The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail's assets and liabilities follow: Carrying Amount 120,000 5,090,000 110,000 Fair Value 120,000 5,860,000 4,020,000 160,000 (195,000) 2,020,000 (195,000) Cash and receivables Computing equipment Patented technology Trademark Liabilities Also, as of January 1, 2020, Sauk Trail's computing equipment had a seven-year remaining estimated useful life. The patented technology was estimated to have a four-year remaining useful life. The trademark's useful life was considered indefinite. Ridge Road attributed to goodwill any unidentified excess cost. During the next two years. Sauk Trail reported the following net income and dividends: Dividends Declared 2828 2821 Net Income $ 1,820,000 2,095,000 $ $ 160,000 170,000 a. How much of Ridge Road's $2,900,000 payment for Sauk Trail is attributable to goodwill? b. What amount should Ridge Road report for its equity in Sauk Trail's earnings on its income statements for 2020 and 2021? c. What amount should Ridge Road report for its investment in Sauk Trail on its balance sheets at the end of 2020 and 2021? Req A Complete this question by entering your answers in the tabs below. Goodwill Req B and C How much of Ridge Road's $2,900,000 payment for Sauk Trail is attributable to goodwill? < Req A Req B and C > Reg A Req B and C b. What amount should Ridge Road report for its equity in Sauk Trail's earnings on its income statements for 2020 and 2021? c. What amount should Ridge Road report for its investment in Sauk Trail on its balance sheets at the end of 2020 and 2021? 2020 Equity in Sauk Trail's earnings b. C. Investment in Sauk Trail < Req A 2021 Req Band C >
Expert Answer:
Answer rating: 100% (QA)
a Acquisition Price Book value acquired 5285000 20 Excess payment Excess fair value computing equ... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
Posted Date:
Students also viewed these accounting questions
-
On January 1, 2017, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc., for $2,700,000 in cash. Both companies provide commercial Internet support services but serve...
-
On January 1, 2014, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc. for $2,700,000 in cash. Both companies provide commercial Internet support services but serve...
-
On January 1, 2020, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc., for $2,700,000 in cash. Both companies provide commercial Internet support services but serve...
-
SG Company acquired 80% of Popsters Company on January 1, 2019, when the stockholders equity of Popsters consisted of: Ordinary shares, P100 par P500,000 Paid in capital in excess of par 400,000...
-
The following information pertains to Royal Auto Parts's ending inventory for the current year. Determine the value of the ending inventory using the lower-of-cost-or-market rule applied to (1) Each...
-
In 2016, Margaret and John Murphy (both over age 65) are married taxpayers who file a joint tax return with AGl of $26,500. During the year they incurred the following expenses: Medical insurance...
-
Several 95% confidence intervals for the mean response will be constructed, based on a data set for which the sample mean value for the explanatory variable is x = 10. The values of x for which the...
-
Samuel Cox, owner of Cox Video Center, sent the income statement shown on the next page to several of his creditors who had asked for financial statements. The business is a sole proprietorship that...
-
Durable Vinyl Company manufactures tables with vinyl tops. For each table, 6 square feet of vinyl at a standard cost of P1.30 per square foot are required. A production run of 1,000 tables in...
-
Their 1.5 inch, 90-degree copper elbow (see below) is a very popular item in the plumbing line that comes packaged in 10 elbows per box. The box costs about $65 to Western, and Western sells it at...
-
Information systems have enormous strategic value so when they are not working, even for a short time, an organization cannot function. Furthermore, the life cycle costs, which comprises of...
-
Andreas Broszio just started as an analyst for Credit Suisse in Geneva, Switzerland. He receives the following quotes for Swiss francs (CHF) against the dollar (USD) for spot, 1 month forward, 3...
-
Simplify the following expression completely. x+52 - 14 - x+3x-10 Enter the numerator and denominator separately in the boxes below. If the denominator is 1, enter the number 1. Do not leave either...
-
Marvel Parts, Incorporated, manufactures auto accessories. One of the company's products is a set of seat covers that can be adjusted to fit nearly any small car. The company uses a standard cost...
-
Simulate the following scenario to find the maximum profit and the optimal set of items using 0/1 Knapsack algorithm. Knapsack Size 15 Item Profit Weight A 25 5 B 33 4 C 15 2 D 20 E 21 6
-
Conduct a detailed Environmental Scan of the company using 3 different frameworks including traditional and digital. You should refer to your offline/digital marketing audit wherever necessary in the...
-
For personal trainers, adversity offers an opportunity to help clients ______________________. become less aware of deficiencies become more aware of priorities become more aware of priorities and...
-
The manager for retail customers, Katie White, wants to hear your opinion regarding one business offer she has received from an entrepreneur who is starting a mobile phone app called Easy Money. The...
-
Top Company holds 90 percent of Bottom Companys common stock. In the current year, Top reports sales of $800,000 and cost of goods sold of $600,000. For this same period, Bottom has sales of $300,000...
-
Which organization is responsible for issuing reporting standards for private not-for-profit colleges and universities?
-
The partnership of Butler, Osman, and Ward was formed several years as a local tax preparation firm. Two partners have reached retirement age and the partners have decided to terminate operations and...
-
CrossCanada Transport Inc. (CC) provides warehouse and distribution services. The excerpts that follow are adapted from CC's financial statements for fiscal year 2020. {Requirements} 1. How much was...
-
Part 1. The Coca-Cola Company's (CCC) balance sheet reports the asset Goodwill. Assume that CCC purchased an asset to be included in Goodwill as part of the acquisition of another company, which...
-
At the end of 2019, a telecommunications company had total assets of \(\$ 15.3\) billion and total liabilities of \(\$ 10.7\) billion. Included among the assets were property, plant, and equipment...
Study smarter with the SolutionInn App