4 Book Ask Print rences Check my work On January 1, 2024, Pine Company owns 40 percent (96,000 shares) of Seacrest, Incorporated, which it purchased several years ago for $487,200. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2024, is $645,600. Excess patent cost amortization of $28,800 is still being recognized each year. During 2024, Seacrest reports net income of $678,000 and a $288,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Pine sold 19,200 shares of Seacrest on August 1, 2024, for $187,555 in cash. However, Pine retains the ability to significantly influence the investee. During the last quarter of 2023, Pine sold $64,000 in inventory (which it had originally purchased for only $38,400) to Seacrest. At the end of that fiscal year, Seacrest's inventory retained $18,400 (at sales price) of this merchandise, which was subsequently sold in the first quarter of 2024. Required: On Pine's financial statements for the year ended December 31, 2024, what income effects would be reported from its ownership in Seacrest? Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar. SEACREST, INCORPORATED
4 Book Ask Print rences Check my work On January 1, 2024, Pine Company owns 40 percent (96,000 shares) of Seacrest, Incorporated, which it purchased several years ago for $487,200. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2024, is $645,600. Excess patent cost amortization of $28,800 is still being recognized each year. During 2024, Seacrest reports net income of $678,000 and a $288,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Pine sold 19,200 shares of Seacrest on August 1, 2024, for $187,555 in cash. However, Pine retains the ability to significantly influence the investee. During the last quarter of 2023, Pine sold $64,000 in inventory (which it had originally purchased for only $38,400) to Seacrest. At the end of that fiscal year, Seacrest's inventory retained $18,400 (at sales price) of this merchandise, which was subsequently sold in the first quarter of 2024. Required: On Pine's financial statements for the year ended December 31, 2024, what income effects would be reported from its ownership in Seacrest? Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar. SEACREST, INCORPORATED
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 23E
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On January 1, 2024, Pine Company owns 40 percent (96,000 shares) of Seacrest, Incorporated, which it purchased
several years ago for $487,200. Since the date of acquisition, the equity method has been properly applied, and the
carrying amount of the investment account as of January 1, 2024, is $645,600. Excess patent cost amortization of
$28,800 is still being recognized each year. During 2024, Seacrest reports net income of $678,000 and a
$288,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared
during the year. Pine sold 19,200 shares of Seacrest on August 1, 2024, for $187,555 in cash. However, Pine retains
the ability to significantly influence the investee.
During the last quarter of 2023, Pine sold $64,000 in inventory (which it had originally purchased for only $38,400)
to Seacrest. At the end of that fiscal year, Seacrest's inventory retained $18,400 (at sales price) of this merchandise,
which was subsequently sold in the first quarter of 2024.
Required:
On Pine's financial statements for the year ended December 31, 2024, what income effects would be reported from
its ownership in Seacrest?
Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar.
SEACREST, INCORPORATED
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