On January 1, 2023, Sarasota Corporation purchased 30% of the common shares of Martz Limited for $200,000. Martz shares are not traded in an active market. The carrying amount of Martz's net assets was $540,000 on that date. Any excess of the purchase cost over Sarasota's share of Martz's carrying amount is attributable to unrecorded intangibles with a 20-year life. During the year, Martz earned net income and comprehensive income of $80,000 and paid dividends of $16,000. The investment in Martz had a fair value of $205,000 at December 31, 2023. During 2024, Martz incurred a net loss and comprehensive loss of $85,000 and paid no dividends. At December 31, 2024, the fair value of the investment was $144,000 and the recoverable amount was $153,000. Assume that Sarasota follows IFRS.
On January 1, 2023, Sarasota Corporation purchased 30% of the common shares of Martz Limited for $200,000. Martz shares are not traded in an active market. The carrying amount of Martz's net assets was $540,000 on that date. Any excess of the purchase cost over Sarasota's share of Martz's carrying amount is attributable to unrecorded intangibles with a 20-year life. During the year, Martz earned net income and comprehensive income of $80,000 and paid dividends of $16,000. The investment in Martz had a fair value of $205,000 at December 31, 2023. During 2024, Martz incurred a net loss and comprehensive loss of $85,000 and paid no dividends. At December 31, 2024, the fair value of the investment was $144,000 and the recoverable amount was $153,000. Assume that Sarasota follows IFRS.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
None
Transcribed Image Text:On January 1, 2023, Sarasota Corporation purchased 30% of the common shares of Martz Limited for $200,000. Martz shares are not
traded in an active market. The carrying amount of Martz's net assets was $540,000 on that date. Any excess of the purchase cost
over Sarasota's share of Martz's carrying amount is attributable to unrecorded intangibles with a 20-year life. During the year, Martz
earned net income and comprehensive income of $80,000 and paid dividends of $16,000. The investment in Martz had a fair value of
$205,000 at December 31, 2023. During 2024, Martz incurred a net loss and comprehensive loss of $85,000 and paid no dividends. At
December 31, 2024, the fair value of the investment was $144,000 and the recoverable amount was $153,000. Assume that Sarasota
follows IFRS.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
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