Need help with this accounting problem On 1-1-2015 Broadhead corp. purchased 30% of Camp Tech for $45 million.The purchase gave Broadhead significant influence over Camp Tech. On thedate of purchase, the book value of Camp Tech's net assets was $75 millionand their fair value was $90 million. The difference was because of the fairvalue of equipment exceeding book value, and the remaining useful life ofthis equipment was 5 years. In 2014, Camp Tech reported a net income of$75 million and declared and paid $20 million in dividends.A) Relative to its investment in Camp Tech, what is the amount ofinvestment income reported by Broadhead corp. on it's year end 12-31-15income statement?B) What is the total amount that Broadhead corp. would report for it'sinvestment in Camp Tech on its 12-31-15 balance sheet?C) Assuming Broadhead cannot exercise significant influence over CampTech and classifies this investment as available for sale, what is the totalinvestment income reported by Broadhead Corp. on it's year end 12-31-15income statement?

Step 1: Define Investment IncomeIncome which is earned due to amount invested into financial…

Answered: On 1-1-2015 Broadhead corp. purchased…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11PB: On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received...

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On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
At the beginning of 2016, Metatec Inc. acquired Ellison Technology Corporation for $600 million. In addition tocash, receivables, and inventory, the following assets and their fair values were also acquired:Plant and equipment (depreciable assets) $150 millionPatent 40 millionGoodwill 100 millionThe plant and equipment are depreciated over a 10-year useful life on a straight-line basis. There is no estimated residual value. The patent is estimated to have a 5-year useful life, no residual value, and is amortizedusing the straight-line method.At the end of 2018, a change in business climate indicated to management that the assets of Ellison might beimpaired. The following amounts have been determined:Plant and equipment:Undiscounted sum of future cash flows $ 80 millionFair value 60 millionPatent:Undiscounted sum of future cash flows $ 20 millionFair value 13 millionGoodwill:Fair value of Ellison Technology Corporation $450 millionFair value of Ellison’s net assets (excluding goodwill)…
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