CHAPTER02 PROB 4 6 7

CHAPTER02 PROB 4 6 7 - Problem 4 Cost of 30% investment...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Problem 4 Cost of 30% investment 1,500,000 Book value of Stergis 4,800,000 Blake’s ownership 30% 1,440,000 Purchase discrepancy 60,000 Allocated: FV - BV Buildings 84,000 x 30% 25,200 Dr Balance - goodwill 34,800 Dr Part A - Significant Influence January 1, Year 5 Investment in Stergis 1,500,000 Cash 1,500,000 To record purchase of 30% of Stergis. December 31, Year 5 Investment in Stergis 12,600 Investment Income 12,600 To record 30% of Stergis’s Year 5 net income. 30% x 42,000 = 12,600 Cash 18,000 Investment in Stergis 18,000 To record 30% of Stergis’s Year 5 dividends. 30% x 60,000 = 18,000 Investment income 2,520 Investment in Stergis 2,520 To record amortization of purchase discrepancy as follows: Building 25,200 / 10 years = 2,520 December 31, Year 6 Investment in Stergis 36,000 Investment income 36,000 To record 30% of Stergis’s Year 6 net income. 30% x 120,000 = 36,000
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Cash 18,000 Investment in Stergis 18,000 To record 30% of Stergis’s Year 6 dividends. 30% x 60,000 = 18,000
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/09/2011 for the course ACCT 354 taught by Professor Wilson during the Spring '11 term at Concordia AB.

Page1 / 5

CHAPTER02 PROB 4 6 7 - Problem 4 Cost of 30% investment...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online