On January 4, 2017, Harley, Inc. acquired 40% of the outstanding common stock of Bike Co. for
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On January 4, 2017, Harley, Inc. acquired 40% of the outstanding common stock of Bike Co. for $2,400,000. This investment gave Harley the ability to exercise significant influence over Bike. Bike’s assets on that date were recorded at $10,500,000 with liabilities of $4,500,000. There were no other differences between book and fair values.
During 2017, Bike reported net income of $500,000. For 2018, Bike reported net income of $800,000. Dividends of $300,000 were paid in each of these two years.
How much income did Harley report from Bike for 2017?
Related Book For
South western Federal Taxation 2018 Corporations Partnerships Estates and Trusts
ISBN: 978-1337385985
41st edition
Authors: William H. Hoffman, William A. Raabe, James C. Young, Annette Nellen, David M. Maloney
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