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
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![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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8683dff0-ea19-458a-9dc4-a5ecf9546056%2F14fddcbd-5ec8-48ca-ada3-1333580dbd5a%2Fm49alvd_processed.jpeg&w=3840&q=75)
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.
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