On January 1, 2020, Stream Company acquired 20 percent of the outstanding voting shares of Q-Video,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 1, 2020, Stream Company acquired 20 percent of the outstanding voting shares of Q-Video, Inc., for $702,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $2.0 million and $746,000, respectively. A customer list compiled by Q-Video had an appraised value of $330,000, although it was not recorded on its books. The expected remaining life of the customer list was twenty years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill. Q-Video generated net income of $208,000 in 2020 and a net loss of $84,000 in 2021. In each of these two years, Q-Video declared and paid a cash dividend of $10,000 to its stockholders. During 2020, Q-Video sold inventory that had an original cost of $92,040 to Stream for $156,000. Of this balance, $78,000 was resold to outsiders during 2020, and the remainder was sold during 2021. In 2021, Q-Video sold inventory to Stream for $184,000. This inventory had cost only $138,000. Stream resold $98,000 of the inventory during 2021 and the rest during 2022. For 2020 and then for 2021, compute the amount that Stream should report as income from its investment in Q-Video in its external financial statements under the equity method. (Enter your answers in whole dollars and not in millions. Do not round intermediate calculations.) Answer is not complete. 2020 2021 Equity income of $ 22,940 x Equity loss of On January 1, 2020, Stream Company acquired 20 percent of the outstanding voting shares of Q-Video, Inc., for $702,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $2.0 million and $746,000, respectively. A customer list compiled by Q-Video had an appraised value of $330,000, although it was not recorded on its books. The expected remaining life of the customer list was twenty years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill. Q-Video generated net income of $208,000 in 2020 and a net loss of $84,000 in 2021. In each of these two years, Q-Video declared and paid a cash dividend of $10,000 to its stockholders. During 2020, Q-Video sold inventory that had an original cost of $92,040 to Stream for $156,000. Of this balance, $78,000 was resold to outsiders during 2020, and the remainder was sold during 2021. In 2021, Q-Video sold inventory to Stream for $184,000. This inventory had cost only $138,000. Stream resold $98,000 of the inventory during 2021 and the rest during 2022. For 2020 and then for 2021, compute the amount that Stream should report as income from its investment in Q-Video in its external financial statements under the equity method. (Enter your answers in whole dollars and not in millions. Do not round intermediate calculations.) Answer is not complete. 2020 2021 Equity income of $ 22,940 x Equity loss of
Expert Answer:
Answer rating: 100% (QA)
2020 Streams share of QVideos net income in 2020 20 208000 QVideos net incom... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
Posted Date:
Students also viewed these accounting questions
-
On January 1, 2020, Stream Company acquired 30 percent of the outstanding voting shares of Q-Video, Inc., for $684,000. Q-Video manufactures specialty cables for computer monitors. On that date,...
-
A house girl added 20g of sodium chloride (NaCl) to 80g of water (atomic masses are Na=23amu, Cl=35.5amu). Calculate a)Percent(w/w) of NaCl b)Mole fraction of NaCl
-
An urn contains four chips numbered 1 through 4. Two are drawn without replacement. Let the random variable X denote the larger of the two. Find E(X).
-
Name an example of bundled products you are familiar with. Why would a company use a bundled pricing strategy for its products? Why not just sell the items separately and charge a higher price? What...
-
How is the distributed load converted into an equivalent joint force vector in the finite element method?
-
Leach Distributors packages and distributes industrial supplies. A standard shipment can be packaged in a class A container, a class K container, or a class T container. A single class A container...
-
6. If an airplane does a vertical loop in the air, with a circular arc of radius 273 meters, then what speed does the plane have to go for the pilot to experience (a) versus (b) as stated below. [...
-
A research poll asked 1689 Americans "From what you've read and heard, is there solid evidence that the average temperature on earth has been getting warmer over the past few decades, or not?". The...
-
In 2019, Bob will sell land that he bought in 2009 for $50,000 to Tom. The selling price is $250,000. Tom has given Bob two options for the sale. Under option 1, Bob would receive the $250,000 at the...
-
Bill is a cash basis, calendar-year taxpayer. Which oft he following December items result in gross income or deductions for the current year? a. Check received for December rent, $700, not deposited...
-
Y uses the FIFO method in computing its inventory. On January 1, 2019, its beginning inventory of 3,500 units consisted of the following: During 2019, Y purchased the following units: During 2019, it...
-
(Research Problem) Obtain a copy of a recent comprehensive annual financial report (CAFR) of a state or local government from the government, the Internet, your professor, or a library. Required (1)...
-
Justin, a product development specialist at DuPont, plans to write an e-mail message to his dad asking for a loan. The purpose of the loan will be to start a company to sell an environmentally...
-
While the role of PR practitioners is to serve their clients, a journalists role is to serve the public. What does this mean in practice?
-
Write a program that initializes an array. It inputs a value from the user and searches the number in the array.
-
A pillar is shown in Fig. 13.14. The total contraction of the pillar is \(0.25 \mathrm{~mm}\). If \(E_{s}=200 \mathrm{GPa}\) and \(E_{C I}=\) \(120 \mathrm{GPa}\), find the value of load \(P\). Cast...
-
A steel rod \(60 \mathrm{~mm}\) in diameter and \(2 \mathrm{~m}\) long is subjected to a pull of \(120 \mathrm{kN}\). It the strain is to increase by 10 percent, find the length of \(20...
-
A stepped bar as shown in Fig. 13.19 is held between two rigid supports such that there is a gap of \(1.0 \mathrm{~mm}\) between the lower support and the bar. Calculate the stresses in the bar. Take...
Study smarter with the SolutionInn App