This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: $280,000. SOS’s Balance Sheet on that date is shown below: Cash $300,000 Accounts Receivable $100,000 Patent $200,000 Assets $600,000 Accounts Payable $200,000 Common Stock $200,000 Retained Earnings $200,000 Total Liabilities and Equity $600,000 SOS’s book values equalled their fair market values on the acquisition date, with the exception of the Patent, which was said to have a fair market value of $300,000. The patent had a remaining useful life of ten years from the acquisition date. The patent is being amortized on a straight line basis with no residual value at the end of its useful life. SOS reported Net Incomes of $40,000 and $50,000 for 2000 and 2001 respectively. SOS also paid dividends of $10,000 in each of the two years. Required: 1. Calculate the Goodwill on the date of acquisition. 2. Calculate the balance in XYZ’s Investment account as at December 31, 2001....
View Full Document
- Winter '09
- Balance Sheet, Generally Accepted Accounting Principles, consolidated balance sheet, Prepare Jean Inc