2-27 - P2-27 Computation of Account Balances Allocation of...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: P2-27 Computation of Account Balances Allocation of purchase differential: $150,000 40% (200,000 + 40,000 + 80,000) = $22,000 Building & Equip Goodwill Difference 35,000 40% of Difference 14,000 8,000 22,000 life 5 2,800 a. Easy Chair Company 20X1 equity-method income: Proportionate share of reported income ($30,000 x .40) Amortization of purchase differential assigned to: Buildings and equipment [($35,000 x .40) / 5 years] Goodwill ($8,000: not amortized) Investment Income $ 12,000 (2,800) -0$ 9,200 b. c. Dividend income, 20X1 ($9,000 x .40) Cost-method account balance (unchanged): Equity-method account balance: Balance, January 1, 20X1 Investment income Dividends received Balance, December 31, 20X1 $ 3,600 $150,000 $150,000 9,200 (3,600) $155,600 ...
View Full Document

This note was uploaded on 04/18/2008 for the course ACCT cost taught by Professor Staff during the Spring '08 term at Oklahoma State.

Ask a homework question - tutors are online