On January 1, 2018, D, Incorporated, paid $88,959 for a 30% interest in SCorporation. This investee had assets with a book value of $500,000 andliabilities of $300,000. A patent held by S Inc having a book value of $10,000was actually worth $48,000 with a four year remaining life. Any goodwillassociated 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 theoperations of S Inc. During the 2018, S Corporation selling inventory costing40,000 to to D Corporation for 60,000 at the end of fiscal year, D Inc, stillretain 20,000. During the 2019 S Corporation selling inventory costing35,000 to to D Corporation for 50,000 at the end of fiscal year, d Inc. stillretain 15,000. The retain inventoy was selling at the beginning of thefollowing year.8-How Much Your Equity Increase For Year 2019.

The Equity in income of S Inc. for 2019 is = $21120.

Answered: On January 1, 2018, D, Incorporated,…

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

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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