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On January 1, 2021, Hemingway Co. acquired all of the common stock of Crotec Corp. For 2021, Crotec earned net income of $390,000 and paid dividends of $225,000. Amortization of the patent allocation that was included in the acquisition was $13,000. How much difference would there have been in Hemingway's income with regard to the effect of the investment, between using the equity method or using the initial value method of internal recordkeeping? Select one: a. $178,000. Ob. $13,000. OC. $167,000. d. $165,000. Oe. $152,000.

On January 1, 2021, Hemingway Co. acquired all of the common stock of Crotec Corp. For 2021, Crotec earned net income of $390,000 and paid dividends of $225,000. Amortization of the patent allocation that was included in the acquisition was $13,000. How much difference would there have been in Hemingway's income with regard to the effect of the investment, between using the equity method or using the initial value method of internal recordkeeping? Select one: a. $178,000. Ob. $13,000. OC. $167,000. d. $165,000. Oe. $152,000.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On January 1, 2021, Hemingway Co. acquired all of the common stock of Crotec Corp. For 2021, Crotec earned net income of $390,000 and paid dividends of $225,000. Amortization of the patent allocation that was included in the acquisition was $13,000. How much difference would there have been in Hemingway's income with regard to the effect of the investment, between using the equity method or using the initial value method of internal recordkeeping? Select one: O a. $178,000. b. $13,000. Oc. $167,000. d. $165,000. Oe. $152,000.
Transcribed Image Text:On January 1, 2021, Hemingway Co. acquired all of the common stock of Crotec Corp. For 2021, Crotec earned net income of $390,000 and paid dividends of $225,000. Amortization of the patent allocation that was included in the acquisition was $13,000. How much difference would there have been in Hemingway's income with regard to the effect of the investment, between using the equity method or using the initial value method of internal recordkeeping? Select one: O a. $178,000. b. $13,000. Oc. $167,000. d. $165,000. Oe. $152,000.
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