• Question: Use the info below to answer the following questions:On January 1, Deacon Co. acquired a 40% interest in Pirate, Inc. for $1,000,000.  At the time of purchase, the book value of the net assets of Pirate equaled $1,875,000.  The purchase price included an excess of $250,000 over book value solely attributable to equipment with a ten-year life. During

  Use the info below to answer the following questions:On January $1,$ Deacon Co$.$ acquired a $40\%$ interest in Pirate, Inc. for $$1,000,000.$  At the time of purchase, the book value of the net assets of Pirate equaled $$1,875,000.$  The purchase price included an excess of $$250,000$ over book value solely attributable to equipment with a ten$-$year life. During the year of acquisition, Pirate reported net income of $$600,000$ and paid dividends of $$150,000.$What amount of Equity Income should Deacon report on its income statement for the year of acquisition?Deacon$’$s Equity Investment balance in Pirate at the end of the acquisition year will be:

 

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ANSWER To answer these questions we need to calculate the following 1 The amount of Equity Income De... View the full answer