On January 2, Koo Company purchased a 25 percent interest in Poo Company for $240,000. On this date, the book value of Poo’s stockholders’ equity was $400,000. The carrying amounts of Poo’s identifiable net assets approximated fair values, except for land, whose fair value exceeded its carrying amount by $150,000. Poo reported net income of $100,000 and paid no dividends. Koo accounts for this investment using the equity method. In its December 31 balance sheet, what amount should Koo report for this investment?

Answer rating: 100% (QA)

First lets calculate the excess purchase price over book value Excess purchase ... View the full answer