On January 1, 2021, Pine Company owns 40 percent (92,000 shares) of Seacrest, Inc., which it purchased several years ago for $476,100. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2021, is $627,900. Excess patent cost amortization of $27,600 is still being recognized each year. During 2021, Seacrest reports net income of $654,000 and a $276,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Pine sold 18,400 shares of Seacrest on August 1, 2021, for $182,021 in cash. However, Pine retains the ability to significantly influence the investee. During the last quarter of 2020, Pine sold $63,000 in inventory (which it had originally purchased for only $37,800) to Seacrest. At the end of that fiscal year, Seacrest's inventory retained $18,700 (at sales price) of this merchandise, which was subsequently sold in the first quarter of 2021. On Pine's financial statements for the year ended December 31, 2021, what income effects would be reported from its ownership in Seacrest? (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Answer is not complete. SEACREST, INC. Equity income Gain on sale of investment Other comprehensive loss 000

CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 62P
icon
Related questions
Question

Don't give answer in image format 

On January 1, 2021, Pine Company owns 40 percent (92,000 shares) of Seacrest, Inc., which it purchased several years ago for
$476,100. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment
account as of January 1, 2021, is $627,900. Excess patent cost amortization of $27,600 is still being recognized each year. During 2021,
Seacrest reports net income of $654,000 and a $276,000 other comprehensive loss, both incurred uniformly throughout the year. No
dividends were declared during the year, Pine sold 18,400 shares of Seacrest on August 1, 2021, for $182,021 in cash. However, Pine
retains the ability to significantly influence the investee.
During the last quarter of 2020, Pine sold $63,000 in inventory (which it had originally purchased for only $37,800) to Seacrest. At the
end of that fiscal year, Seacrest's inventory retained $18,700 (at sales price) of this merchandise, which was subsequently sold in the
first quarter of 2021.
On Pine's financial statements for the year ended December 31, 2021, what income effects would be reported from its ownership in
Seacrest? (Do not round intermediate calculations. Round your answers to the nearest whole dollar.)
Answer is not complete.
SEACREST, INC.
Equity income
Gain on sale of investment
Other comprehensive loss
100
Transcribed Image Text:On January 1, 2021, Pine Company owns 40 percent (92,000 shares) of Seacrest, Inc., which it purchased several years ago for $476,100. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2021, is $627,900. Excess patent cost amortization of $27,600 is still being recognized each year. During 2021, Seacrest reports net income of $654,000 and a $276,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year, Pine sold 18,400 shares of Seacrest on August 1, 2021, for $182,021 in cash. However, Pine retains the ability to significantly influence the investee. During the last quarter of 2020, Pine sold $63,000 in inventory (which it had originally purchased for only $37,800) to Seacrest. At the end of that fiscal year, Seacrest's inventory retained $18,700 (at sales price) of this merchandise, which was subsequently sold in the first quarter of 2021. On Pine's financial statements for the year ended December 31, 2021, what income effects would be reported from its ownership in Seacrest? (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Answer is not complete. SEACREST, INC. Equity income Gain on sale of investment Other comprehensive loss 100
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 5 steps with 4 images

Blurred answer
Knowledge Booster
Accounting for Financial Instruments
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
CONCEPTS IN FED.TAX., 2020-W/ACCESS
CONCEPTS IN FED.TAX., 2020-W/ACCESS
Accounting
ISBN:
9780357110362
Author:
Murphy
Publisher:
CENGAGE L
SWFT Comprehensive Vol 2020
SWFT Comprehensive Vol 2020
Accounting
ISBN:
9780357391723
Author:
Maloney
Publisher:
Cengage
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
Accounting
ISBN:
9780357391266
Author:
Nellen
Publisher:
Cengage
SWFT Individual Income Taxes
SWFT Individual Income Taxes
Accounting
ISBN:
9780357391365
Author:
YOUNG
Publisher:
Cengage
SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
Accounting
ISBN:
9780357233306
Author:
Maloney
Publisher:
Cengage