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On January 1, 2023, Stream Company acquired 25 percent of the outstanding voting shares of Q-Video, Incorporated, for $718,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $1.8 million and $669,000, respectively. A customer list compiled by Q-Video had an appraised value of $234,000, although it was not recorded on its books. The expected remaining life of the customer list was five years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill. Q-Video generated net income of $222,000 in 2023 and a net loss of $147,000 in 2024. In each of these two years, Q-Video declared and paid a cash dividend of $16,000 to its stockholders. During 2023, Q-Video sold inventory that had an original cost of $111,000 to Stream for $150,000. Of this balance, $75,000 was resold to outsiders during 2023, and the remainder was sold during 2024. In 2024, Q-Video sold inventory to Stream for $175,000. This inventory had cost only $140,000. Stream resold $98,000 of the inventory during 2024 and the rest during 2025. Required: For 2023 and then for 2024, compute the amount that Stream should report as income from its investment in Q-Video in its external financial statements under the equity method. Note: Enter your answers in whole dollars and not in millions. X Answer is complete but not entirely correct. Equity income Equity loss 2023 2024 of $ 38,925 of $ 45,748 X

On January 1, 2023, Stream Company acquired 25 percent of the outstanding voting shares of Q-Video, Incorporated, for $718,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $1.8 million and $669,000, respectively. A customer list compiled by Q-Video had an appraised value of $234,000, although it was not recorded on its books. The expected remaining life of the customer list was five years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill. Q-Video generated net income of $222,000 in 2023 and a net loss of $147,000 in 2024. In each of these two years, Q-Video declared and paid a cash dividend of $16,000 to its stockholders. During 2023, Q-Video sold inventory that had an original cost of $111,000 to Stream for $150,000. Of this balance, $75,000 was resold to outsiders during 2023, and the remainder was sold during 2024. In 2024, Q-Video sold inventory to Stream for $175,000. This inventory had cost only $140,000. Stream resold $98,000 of the inventory during 2024 and the rest during 2025. Required: For 2023 and then for 2024, compute the amount that Stream should report as income from its investment in Q-Video in its external financial statements under the equity method. Note: Enter your answers in whole dollars and not in millions. X Answer is complete but not entirely correct. Equity income Equity loss 2023 2024 of $ 38,925 of $ 45,748 X

FINANCIAL ACCOUNTING
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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am. 12.

On January 1, 2023, Stream Company acquired 25 percent of the outstanding voting shares of Q-Video, Incorporated, for $718,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $1.8 million and $669,000, respectively. A customer list compiled by Q-Video had an appraised value of $234,000, although it was not recorded on its books. The expected remaining life of the customer list was five years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill. Q-Video generated net income of $222,000 in 2023 and a net loss of $147,000 in 2024. In each of these two years, Q-Video declared and paid a cash dividend of $16,000 to its stockholders. During 2023, Q-Video sold inventory that had an original cost of $111,000 to Stream for $150,000. Of this balance, $75,000 was resold to outsiders during 2023, and the remainder was sold during 2024. In 2024, Q-Video sold inventory to Stream for $175,000. This inventory had cost only $140,000. Stream resold $98,000 of the inventory during 2024 and the rest during 2025. Required: For 2023 and then for 2024, compute the amount that Stream should report as income from its investment in Q-Video in its external financial statements under the equity method. Note: Enter your answers in whole dollars and not in millions. X Answer is complete but not entirely correct. Equity income Equity loss 2023 2024 of of $ 38,925 $ 45,748 X
Transcribed Image Text:On January 1, 2023, Stream Company acquired 25 percent of the outstanding voting shares of Q-Video, Incorporated, for $718,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $1.8 million and $669,000, respectively. A customer list compiled by Q-Video had an appraised value of $234,000, although it was not recorded on its books. The expected remaining life of the customer list was five years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill. Q-Video generated net income of $222,000 in 2023 and a net loss of $147,000 in 2024. In each of these two years, Q-Video declared and paid a cash dividend of $16,000 to its stockholders. During 2023, Q-Video sold inventory that had an original cost of $111,000 to Stream for $150,000. Of this balance, $75,000 was resold to outsiders during 2023, and the remainder was sold during 2024. In 2024, Q-Video sold inventory to Stream for $175,000. This inventory had cost only $140,000. Stream resold $98,000 of the inventory during 2024 and the rest during 2025. Required: For 2023 and then for 2024, compute the amount that Stream should report as income from its investment in Q-Video in its external financial statements under the equity method. Note: Enter your answers in whole dollars and not in millions. X Answer is complete but not entirely correct. Equity income Equity loss 2023 2024 of of $ 38,925 $ 45,748 X
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