A Co. and Z Inc. formed AZ Company on January 1, 2021. A Co. invested machinery with a carrying amount of $50,000 and a fair value of $75,000 for a 60% interest in AZ Company. A Co. receives a $15,000 cash in return for investing the machinery in AZ Company. While Z Inc. contributed another machinery, which was similar to the equipment contributed by A Co., with a total fair value of $90,000, and $17,000 cash for a 40% interest in ST Company. The machinery has an estimated useful life of 5 years. On December 31, 2021. AZ Company reported a net income of $40,000. Assume that the transaction does have commercial substance. What is the balance of the Investment in Joint Venture in the financial position of S Co. as of December 31, 2021. a. $68.213 b. $84,000 c. $68,000 d. $83.000

A Co. and Z Inc. formed AZ Company on January 1, 2021. A Co. invested machinery with a carrying amount of $50,000 and a fair value of $75,000 for a 60% interest in AZ Company. A Co. receives a $15,000 cash in return for investing the machinery in AZ Company. While Z Inc. contributed another machinery, which was similar to the equipment contributed by A Co., with a total fair value of $90,000, and $17,000 cash for a 40% interest in ST Company. The machinery has an estimated useful life of 5 years. On December 31, 2021. AZ Company reported a net income of $40,000. Assume that the transaction does have commercial substance. What is the balance of the Investment in Joint Venture in the financial position of S Co. as of December 31, 2021. a. $68.213 b. $84,000 c. $68,000 d. $83.000

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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Question

A Co. and Z Inc. formed AZ Company on
January 1, 2021. A Co. invested machinery
with a carrying amount of $50,000 and a fair
value of $75,000 for a 60% interest in AZ
Company. A Co. receives a $15,000 cash in
return for investing the machinery in AZ
Company. While Z Inc. contributed another
machinery, which was similar to the
equipment contributed by A Co., with a total
fair value of $90,000, and $17,000 cash for a
40% interest in ST Company. The machinery
has an estimated useful life of 5 years. On
December 31, 2021. AZ Company reported a
net income of $40,000. Assume that the
transaction does have commercial substance.
What is the balance of the Investment in Joint
Venture in the financial position of S Co. as of
December 31, 2021.
a. $68.213
b. $84,000
c. $68,000
d. $83.000

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