Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2020, for $190,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2021, Milani purchased an additional 30 percent of Seida for $600,000 which resulted in significant influence over Seida. On that date, the fair value of Seida’s common stock was $2,000,000 in total. Seida’s January 1, 2021, book value equaled $1,850,000, although land was undervalued by $120,000. Any additional excess fair value over Seida’s book value was attributable to a trademark with an eight-year remaining life. During 2021, Seida reported income of $300,000 and declared and paid dividends of $110,000. Prepare the 2021 journal entries for Milani related to its investment in Seida. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2020, for $190,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2021, Milani purchased an additional 30 percent of Seida for $600,000 which resulted in significant influence over Seida. On that date, the fair value of Seida’s common stock was $2,000,000 in total. Seida’s January 1, 2021, book value equaled $1,850,000, although land was undervalued by $120,000. Any additional excess fair value over Seida’s book value was attributable to a trademark with an eight-year remaining life. During 2021, Seida reported income of $300,000 and declared and paid dividends of $110,000.
Prepare the 2021 journal entries for Milani related to its investment in Seida. (If no entry is required for a transaction/event, select "No
3. Record 2021 amortization for trademark excess fair value.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
