6. On January 1, Puckett Company paid $1.6 million for 50,000 shares of Harrison's voting com-...

 

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6. On January 1, Puckett Company paid $1.6 million for 50,000 shares of Harrison's voting com- mon stock, which represents a 40 percent investment. No allocation to goodwill or other spe- cific account was made. Significant influence over Harrison is achieved by this acquisition and so Puckett applies the equity method. Harrison declared a $2 per share dividend during the year and reported net income of $560,000. What is the balance in the Investment in Harrison account found in Puckett's financial records as of December 31? a. $1,724,000. b. $1,784,000. c. $1,844,000. d. $1,884,000. 7. In January 2014, Domingo, Inc., acquired 20 percent of the outstanding common stock o Martes, Inc., for $700,000. This investment gave Domingo the ability to exercise significan influence over Martes. Martes's assets on that date were recorded at $3,900,000 with liabilitie of $900,000. Any excess of cost over book value of the investment was attributed to a patem having a remaining useful life of 10 years. In 2014, Martes reported net income of $170,000. In 2015, Martes reported net income c $210,000. Dividends of $70,000 were declared in each of these two years. What is the equin method balance of Domingo's Investment in Martes, Inc., at December 31, 2015? a. $728,000. b. $748,000. c. $756,000. d. $776,000. L1 for $500.000 Althou 6. On January 1, Puckett Company paid $1.6 million for 50,000 shares of Harrison's voting com- mon stock, which represents a 40 percent investment. No allocation to goodwill or other spe- cific account was made. Significant influence over Harrison is achieved by this acquisition and so Puckett applies the equity method. Harrison declared a $2 per share dividend during the year and reported net income of $560,000. What is the balance in the Investment in Harrison account found in Puckett's financial records as of December 31? a. $1,724,000. b. $1,784,000. c. $1,844,000. d. $1,884,000. 7. In January 2014, Domingo, Inc., acquired 20 percent of the outstanding common stock o Martes, Inc., for $700,000. This investment gave Domingo the ability to exercise significan influence over Martes. Martes's assets on that date were recorded at $3,900,000 with liabilitie of $900,000. Any excess of cost over book value of the investment was attributed to a patem having a remaining useful life of 10 years. In 2014, Martes reported net income of $170,000. In 2015, Martes reported net income c $210,000. Dividends of $70,000 were declared in each of these two years. What is the equin method balance of Domingo's Investment in Martes, Inc., at December 31, 2015? a. $728,000. b. $748,000. c. $756,000. d. $776,000. L1 for $500.000 Althou

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Answer 6 560000 x 040 224000 2 share x 50000 100000 Balance 16 million 224000 100000 1724000 Answer ... View the full answer