Park Corporation acquired the voting stock of Sequoia Company on January 1, 2020 for $25 million in
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Question:
Sequoia's reported net assets at the date of acquisition were carried at amounts approximating fair value, except its inventory was overvalued by $500,000 (sold in 2020), its plant assets (10-year life, straight-line) were overvalued by $3,500,000, and its long-term debt (premium amortized over 10 years, straight-line) is undervalued by $100,000. Sequoia also had previously unreported identifiable intangibles (5-year life, straight-line) valued at $5,000,000.
It is now December 31, 2020. Sequoia reports net income of $1,200,000 and other comprehensive income of $50,000 for 2020 and declares and pays dividends of $200,000. None of the revaluations are impaired in 2020. Park uses the complete equity method to account for its investment.
Park's beginning balance of accumulated other comprehensive income is $175,000, and it reports $250,000 in other comprehensive income for 2020 on its own books.
The balance for accumulated other comprehensive income on the December 31, 2020 consolidated balance sheet is?
Related Book For
Federal Taxation 2020 Comprehensive
ISBN: 9780135196274
33rd Edition
Authors: Timothy J. Rupert, Kenneth E. Anderson, David S. Hulse
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