3. EquityMethodBurmanEnterprisesLtdSolution

3. EquityMethodBurmanEnterprisesLtdSolution - LONG-TERM...

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ADM 3340A/B Intermediate Accounting 11 Fall 2008 LONG-TERM INVESTMENTS THE EQUITY METHOD BURMAN ENTERPRISES LIMITED Question On January 1, 2007, Burman Enterprises Limited purchased as a strategic investment 25% of the 300,000 outstanding common shares of Bedford Corporation. The shares of Bedford regularly trade on the Toronto Stock Exchange for $14.00 per share. The following information pertaining to Bedford Corporation was obtained: (a) The common shares had a book value of $11.00 per share on the date of acquisition. (b) The fair market value of all the assets and liabilities was equal to the carrying value except for: (i) land which had a fair market value of $650,000 and a book value of $450,000 on the date of acquisition; and (ii) plant and equipment which had a fair market value of $400,000 and a book value of 150,000 on the date of acquisition. (c) Straight line depreciation is used by Bedford for all its amortizable assets. The useful life of all of Bedford's amortizable assets is estimated at 20 years. (d)
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3. EquityMethodBurmanEnterprisesLtdSolution - LONG-TERM...

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