P1-16+H+10e+Hand-In - P1-16.H 10e(20 Minutes(Equity entries...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
P1-16.H 10e (20 Minutes) (Equity entries for one year, includes conversion to equity method) The 2010 purchase must be restated to the equity method. FIRST PURCHASE—JANUARY 1, 2010 Purchase price of Denton stock ............................................ $210,000 Book value of Denton stock ($1,700,000 × 10%) .................. (170,000 ) Cost in excess of book value ................................................. $40,000 Excess cost assigned to undervalued land ($100,000 × 10%) ................................................................. (10,000 ) Trademark ............................................................................... $30,000 Life of trademark .................................................................... 10 years Annual amortization ............................................................... $3,000 BOOK VALUE—DENTON—JANUARY 1, 2010 January 1, 2010 book value (given) ....................................... $1,700,000 2010 Net income ..................................................................... 240,000 2010 Dividends ....................................................................... (90,000 ) January 1, 2011 book value ................................................ $1,850,000 Waters J/E 2010 1/1/10 Investment in D 210,000 Cash 210,000 10 Cash 9,000 Dividend Income 9,000
Image of page 1

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

View Full Document Right Arrow Icon
P1-16 (continued) SECOND PURCHASE—JANUARY 1, 2011 Purchase price of Denton stock .................................................. $600,000 Book value of Denton stock (above) ($1,850,000 × 30%).(555,000 ) Cost in excess of book value ............................................. $45,000 Excess cost assigned to undervalued land ($120,000 × 30%) ............................................................. (36,000 ) Trademark ...........................................................................
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern