. E 2-5 Calculate incone and investment balance allocation of exeess to undervalued assets Dok Campany acquired a 30 percent interest in Oak on January 1 for $2,000,000 cash. Assume the cost of the invest- ment equals the fair value of Oak's net assets. Dok assigned the $500,000 fair value over book value of the interest 30'5 is a alr acquired to the following assets: →A ssume $100,000 (sold in the current year) $200.000 (4-year remaining life at January 1) $200.000 Inventories Building Goodwill During the year Oak reported net income of $800,000 and paid $200,000 dividends. REQUIRED 1. Determine Dok's income from Oak. 2. Determine the December 31 balance of the Investment in Oak account.

. E 2-5 Calculate incone and investment balance allocation of exeess to undervalued assets Dok Campany acquired a 30 percent interest in Oak on January 1 for $2,000,000 cash. Assume the cost of the invest- ment equals the fair value of Oak's net assets. Dok assigned the $500,000 fair value over book value of the interest 30'5 is a alr acquired to the following assets: →A ssume $100,000 (sold in the current year) $200.000 (4-year remaining life at January 1) $200.000 Inventories Building Goodwill During the year Oak reported net income of $800,000 and paid $200,000 dividends. REQUIRED 1. Determine Dok's income from Oak. 2. Determine the December 31 balance of the Investment in Oak account.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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