26. On January 1, B company paid $2,295,000 to acquire 90,000 shares of O company's voting common stock, which represents a 30 percent investment. No allocations to goodwill or other specific accounts were made. Significant influence over O company is achieved by this acquisition, and so B company applies the equity method. O company declared a $1 per share dividend during the year and reported net income of $750,000. What is the balance in the Investment in O company account found in B company's financial records as of December 31?

26. On January 1, B company paid $2,295,000 to acquire 90,000 shares of O company's voting common stock, which represents a 30 percent investment. No allocations to goodwill or other specific accounts were made. Significant influence over O company is achieved by this acquisition, and so B company applies the equity method. O company declared a $1 per share dividend during the year and reported net income of $750,000. What is the balance in the Investment in O company account found in B company's financial records as of December 31?

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter13: Corporations: Earning & Profits And Distributions

Section: Chapter Questions

Problem 19P

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

26. On January 1, B company paid $2,295,000 to acquire 90,000 shares of O company's voting common stock, which represents a 30 percent investment. No allocations to

goodwill or other specific accounts were made. Significant influence over O company is achieved by this acquisition, and so B company applies the equity method. O company

declared a $1 per share dividend during the year and reported net income of $750,000. What is the balance in the Investment in O company account found in B company's

financial records as of December 31?

Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).

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1 On January 1, Belleville Company paid $1,710,000 to acquire 57,000 shares of O'Fallon's voting common stock, which represents a 40 percent investment. No allocations to goodwill or other specific accounts were made. Significant influence over O'Fallon is achieved by this acquisition, and so Belleville applies the equity method. O'Fallon declared a $3 per share dividend during the year and reported net income of $590,000. What is the balance in the Investment in O'Fallon account found in Belleville's financial records as of December 31? Skipped References Multiple Choice O $1,946,000. $1,775,000. $1,895,000. $1,835,000.
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