Vancouver Inc. purchased 80,000 shares of Victoria Enterprises Limited on July 1, 2012 at a cost...

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Vancouver Inc. purchased 80,000 shares of Victoria Enterprises Limited on July 1, 2012 at a cost of $960,000. Victoria had 100,000 shares outstanding on that date and a net book value of $1,000,000. Any acquisition di,erential was allocated to equipment with a remaining useful life of 8 years from that date. Vancouver accounts for its investment in Victoria using the equity method and valued the noncontrolling interest in Victoria at its fair value, proportionate to the price paid for the controlling interest. During 2012, Victoria earned $200,000 (evenly through the year) and paid dividends of $0.60 per share on June 30 and a further $0.60 per share on December 31. During 2013, Victoria had net income of $300,000 (earned $120,000 from January to June and $180,000 in the last half of the year) and paid dividends of $.50 per share on June 30 and $0.75 per share on December 31. On July 1, 2013, Victoria Enterprises Limited issued an additional 20,000 shares for proceeds of $306,000. Vancouver Inc. declined to purchase any of these shares. Required: Calculate the balance of the "Investment in Victoria Enterprises Limited" account on the books of Vancouver Inc. at December 31, 2013. Vancouver Inc. purchased 80,000 shares of Victoria Enterprises Limited on July 1, 2012 at a cost of $960,000. Victoria had 100,000 shares outstanding on that date and a net book value of $1,000,000. Any acquisition di,erential was allocated to equipment with a remaining useful life of 8 years from that date. Vancouver accounts for its investment in Victoria using the equity method and valued the noncontrolling interest in Victoria at its fair value, proportionate to the price paid for the controlling interest. During 2012, Victoria earned $200,000 (evenly through the year) and paid dividends of $0.60 per share on June 30 and a further $0.60 per share on December 31. During 2013, Victoria had net income of $300,000 (earned $120,000 from January to June and $180,000 in the last half of the year) and paid dividends of $.50 per share on June 30 and $0.75 per share on December 31. On July 1, 2013, Victoria Enterprises Limited issued an additional 20,000 shares for proceeds of $306,000. Vancouver Inc. declined to purchase any of these shares. Required: Calculate the balance of the "Investment in Victoria Enterprises Limited" account on the books of Vancouver Inc. at December 31, 2013.

Answer rating: 100% (QA)

Investment in Victoria Enterprises Limited July 1 2012 80000 shares x 12 ... View the full answer