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ACCT 401 Quiz 1 - ACCT 401 Quiz 1 Fall 2009 Name_Seat...

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ACCT 401 Quiz 1 Fall 2009 Name______________________________________________________Seat______________ Wildcat Company purchased 30% of the common stock of Cougar Company on January 1, 20X9 for $600,000. On the date of acquisition, Cougar had total assets of $3,000,000 and total liabilities of $1,200,000. The book values of all of Cougar’s assets and liabilities approximated fair values, except for a patent which was undervalued by $30,000 and a building which was undervalued by $50,000. The patent had a remaining life of 5 years as of the date of acquisition, and the remaining life of the building was 15 years. During 20X9 Cougar sold merchandise costing $60,000 to Wildcat for $100,000. At 12/31/x9, $15,000 of this inventory was still in Wildcat’s inventory. Cougar reported income of $200,000 for 20X9 and paid dividends of $30,000. A. Prepare all journal entries for 20X9, assuming Wildcat can exercise significant influence. SEE SUPPORTING CALCULATIONS ON NEXT PAGE Investment in Cougar 600,000 Cash 600,000 Cash 9,000 Investment in Cougar 9,000
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