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For 2024, what is the total amount of excess amortization for Madison's 30% investment in Huntsville? Multiple Choice $20,000 $60,000 $36,000

For 2024, what is the total amount of excess amortization for Madison's 30% investment in Huntsville? Multiple Choice $20,000 $60,000 $36,000

FINANCIAL ACCOUNTING
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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On January 3, 2024, Madison Corporation purchased 30% of the voting common stock of Huntsville Company, paying $3,000,000. Madison decided to use the equity method to account for this investment. At the time of the investment, Huntsville's total stockholders' equity was $8,000,000. Madison gathered the following information about Huntsville's assets and liabilities: Buildings (10-year life) Equipment (5-year life) Franchises (8-year life) For all other assets and liabilities, book value and fair value were equal. Any excess of cost over fair value was attributed to goodwill, which has not been impaired. Multiple Choice For 2024, what is the total amount of excess amortization for Madison's 30% investment in Huntsville? $20,000 $60,000 Book Value $ 400,000 $ 1,200,000 $0 $36,000 Fair Value $ 600,000 $ 1,400,000 $ 480,000 $40,000
Transcribed Image Text:On January 3, 2024, Madison Corporation purchased 30% of the voting common stock of Huntsville Company, paying $3,000,000. Madison decided to use the equity method to account for this investment. At the time of the investment, Huntsville's total stockholders' equity was $8,000,000. Madison gathered the following information about Huntsville's assets and liabilities: Buildings (10-year life) Equipment (5-year life) Franchises (8-year life) For all other assets and liabilities, book value and fair value were equal. Any excess of cost over fair value was attributed to goodwill, which has not been impaired. Multiple Choice For 2024, what is the total amount of excess amortization for Madison's 30% investment in Huntsville? $20,000 $60,000 Book Value $ 400,000 $ 1,200,000 $0 $36,000 Fair Value $ 600,000 $ 1,400,000 $ 480,000 $40,000
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