CASE 2 (QS 15-16): On January 1, 2012, Fernando Co. acquired all of the common stock of Harvey Corp. For 2012, Harvey earned net income of $360,000 and paid dividends of $190,000. Amortization of the patent allocation that was included in the acquisition was $6,000. Question 15 How much difference would there have been in Fernando's income with regard to the effect of the investment, between using the equity method or using the initial value method of internal recordkeeping? A) $190,000. B) $360,000. C) $164,000. D) $354,000. E) $150,000. How much difference would there have been in Fernando's income with regard to the effect of the investment, between using the equity method or using the partial equity method of internal recordkeeping? A) $170,000. B) $354,000. C) $164,000. D) $ 6,000. E) $174,000.
CASE 2 (QS 15-16): On January 1, 2012, Fernando Co. acquired all of the common stock of Harvey Corp. For 2012, Harvey earned net income of $360,000 and paid dividends of $190,000. Amortization of the patent allocation that was included in the acquisition was $6,000. Question 15 How much difference would there have been in Fernando's income with regard to the effect of the investment, between using the equity method or using the initial value method of internal recordkeeping? A) $190,000. B) $360,000. C) $164,000. D) $354,000. E) $150,000. How much difference would there have been in Fernando's income with regard to the effect of the investment, between using the equity method or using the partial equity method of internal recordkeeping? A) $170,000. B) $354,000. C) $164,000. D) $ 6,000. E) $174,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:CASE 2 (QS 15-16):
On January 1, 2012, Fernando Co. acquired all of the common stock of Harvey Corp. For
2012, Harvey earned net income of $360,000 and paid dividends of $190,000. Amortization
of the patent allocation that was included in the acquisition was $6,000.
Question 15
How much difference would there have been in Fernando's income with regard to the effect
of the investment, between using the equity method or using the initial value method of
internal recordkeeping?
A) $190,000.
B) $360,000.
C) $164,000.
D) $354,000.
E) $150,000.
How much difference would there have been in Fernando's income with regard to the effect
of the investment, between using the equity method or using the partial equity method of
internal recordkeeping?
A) $170,000.
B) $354,000.
C) $164,000.
D) $ 6,000.
E) $174,000.
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