On January 1, 2018, D, Incorporated, paid $88,959 for a 30% interest in S Corporation. This investee had assets with a book value of $500,0000 and
On January 1, 2018, D, Incorporated, paid $88,959 for a 30% interest in S Corporation. This investee had assets with a book value of $500,0000 and
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 62P
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![On January 1, 2018, D, Incorporated, paid $88,959 for a 30% interest in S
Corporation. This investee had assets with a book value of $500,000 and
liabilities of $300,000. A patent held by S Inc having a book value of $10,000
was actually worth $48,000 with a four year remaining life. Any goodwill
associated with this acquisition is considered to have an indefinite life.
During 2018, S Inc reported income of $55,900 and paid dividends of
$28,900 while in 2019 it reported income of $79,900 and dividends of
$29,900. Assume D Inc. Has the ability to significantly influence the
operations of S Inc. During the 2018, S Corporation selling inventory costing
40,000 to to D Corporation for 60,000 at the end of fiscal year, D Inc, still
retain 20,000. During the 2019 S Corporation selling inventory costing
35,000 to to D Corporation for 50,000 at the end of fiscal year, d Inc. still
retain 15,000. The retain inventoy was selling at the beginning of the
following year.
8-How Much Your Equity Increase For Year 2019.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5c1d9d70-ec13-4485-a925-92d5b363663a%2F76e373b7-c199-40c9-8d4b-4aed950027f3%2F6kd5qt_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 1, 2018, D, Incorporated, paid $88,959 for a 30% interest in S
Corporation. This investee had assets with a book value of $500,000 and
liabilities of $300,000. A patent held by S Inc having a book value of $10,000
was actually worth $48,000 with a four year remaining life. Any goodwill
associated with this acquisition is considered to have an indefinite life.
During 2018, S Inc reported income of $55,900 and paid dividends of
$28,900 while in 2019 it reported income of $79,900 and dividends of
$29,900. Assume D Inc. Has the ability to significantly influence the
operations of S Inc. During the 2018, S Corporation selling inventory costing
40,000 to to D Corporation for 60,000 at the end of fiscal year, D Inc, still
retain 20,000. During the 2019 S Corporation selling inventory costing
35,000 to to D Corporation for 50,000 at the end of fiscal year, d Inc. still
retain 15,000. The retain inventoy was selling at the beginning of the
following year.
8-How Much Your Equity Increase For Year 2019.
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