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Unformatted text preview: Bolivar Co. for $1,200,000. This acquisition gave Jenkins the ability to exercise significant influence over the investee. The book value of the acquired shares was $950,000. Any excess cost over the underlying book value was assigned to a patent that was undervalued on Bolivar's balance sheet. This patent has a remaining useful life of ten years. For the year ended December 31, 2008, Bolivar reported net income of $312,000 and paid cash dividends of $96,000. Required: Prepare a schedule to show the balance Jenkins a should report as its Investment in Bolivar Co. at December 31, 2008. PURCHASE PRICE $1,200,000 BOOK VALUE GIVEN 950,000 PATENT 250,000 / 10 = 25,000 EXTRA EXP. INVESTMENT IN C: PURCHASE PRICE 1,200,000 .4 X NI 124,800 EXTRA EXPENSES ( 25,000) ,4 X DIV (38,400) 1,261,400...
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This note was uploaded on 04/08/2010 for the course ACCT 455 taught by Professor Schwartz during the Spring '10 term at Binghamton University.
- Spring '10