On Jan, 1 2024, NCDA Incorporated purchased 6,000 shares of the outstanding common stock of MT Corporation at acost of $140,000. MT had 30,000 shares of outstanding common stock. The total bok value and total fair value of MT' individual net asets on Jan 1, 2024, are $600,000 and $650,000, respectively. Asume that fair market value increments (i.e., the difference between the fair and book value of Brothers' assets) are depreciated using straight-line over years). The total fair value of hte 30,000 shares of MT's common stock on December 31, 2024, si $760,000. Both companies have a January through December fiscal year. The folowing data pertains ot Mountain Corporation during 2024: Dividends declared and paid, January 1 - December 31: $ 12,000 Netincome, January 1 - December 31: $18,000 1) Assume NCDA wil have significant influence over the financial and operating policies of MT, compute the goodwill (if any) on the acquisition. 2) Prepare the necesary entries of NCDA for 2024 under the equity method. 3) Prepare any necessary entries of NCDA for 2024 that would be required if the securities were accounted for under the fair value through net income method. ?
On Jan, 1 2024, NCDA Incorporated purchased 6,000 shares of the outstanding common stock of MT Corporation at acost of $140,000. MT had 30,000 shares of outstanding common stock. The total bok value and total fair value of MT' individual net asets on Jan 1, 2024, are $600,000 and $650,000, respectively. Asume that fair market value increments (i.e., the difference between the fair and book value of Brothers' assets) are depreciated using straight-line over years). The total fair value of hte 30,000 shares of MT's common stock on December 31, 2024, si $760,000. Both companies have a January through December fiscal year. The folowing data pertains ot Mountain Corporation during 2024: Dividends declared and paid, January 1 - December 31: $ 12,000 Netincome, January 1 - December 31: $18,000 1) Assume NCDA wil have significant influence over the financial and operating policies of MT, compute the goodwill (if any) on the acquisition. 2) Prepare the necesary entries of NCDA for 2024 under the equity method. 3) Prepare any necessary entries of NCDA for 2024 that would be required if the securities were accounted for under the fair value through net income method. ?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:On Jan, 1 2024, NCDA Incorporated purchased 6,000 shares of the outstanding common stock
of MT Corporation at acost of $140,000. MT had 30,000 shares of outstanding common stock.
The total bok value and total fair value of MT' individual net asets on Jan 1, 2024, are $600,000
and $650,000, respectively. Asume that fair market value increments (i.e., the difference
between the fair
and book value of Brothers' assets) are depreciated
using straight-line over years). The total fair value of hte 30,000 shares of MT's common stock
on December 31, 2024, si $760,000. Both companies have a January through December fiscal
year. The folowing data pertains ot Mountain Corporation during 2024:
Dividends declared and paid, January 1 - December 31: $ 12,000
Netincome, January 1 - December 31: $18,000
1) Assume NCDA wil have significant influence over the financial and operating
policies of MT, compute the goodwill (if any) on the acquisition.
2) Prepare the necesary entries of NCDA for 2024 under the equity method.
3) Prepare any necessary entries of NCDA for 2024 that would be required if the
securities were accounted for under the fair value through net income method.
?
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education