On January 2, 2013, Slurg Corporation paid $600,000 to acquire 60% interest in Padwaddy Inc. At that time, the book value of Padwaddy's stockholders' equity included $700,000 of common stock and $1,800,000 of retained earnings. All the excess purchase cost over the book value acquired was attributable to a patent with an estimated life of 10 years. Padwaddy paid $6,250 of dividends each quarter for the next two years, and reported net income of $180,000 for 2013 and $220,000 for 2014. Slurg recorded all activities related to their investment using the equity method.   Required: Calculate Slurg's income from Padwaddy for 2013. Calculate Slurg's income from Padwaddy for 2014. Determine the balance of Slurg's Investment in Padwaddy account on December 31, 2014.

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A: Depreciation can be termed as a reduction in the value of an asset over its useful period when used…

Q: Pell Company purchased 90% of the stock of Silk Company on January 1, 2007, for $1,860,000, an…

A: Date Particulars Debit Credit 31/12/2011 Investment in Silk Co.  1,860,000            To Cash…

Q: On January 1, 2015 ,Pub Corporation made a significant acquisition, purchasing 75 percent of Sub…

A: "Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

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A: Consolidation refers to adding up financial figures of two or more separate entities in systematic…

Q: On January 1, 2018, Marshall Company acquired 100 percent of the outstanding common stock of Tucker…

A: a.

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A: Consolidation is an activity in which financial statements of a parent and its subsidiary should be…

Q: On July 1, 2016, Killearn Company acquired 80,000 of the outstanding shares of Shaun Company for $12…

A: Formulas for the above table:

Q: At the start of the current year, SBC Corp. purchased 30% of Sky Tech Inc. for $51 million. At the…

A: Depreciation can be termed as a reduction in the value of an asset over its useful life when used…

Q: During January 2018, Varren, Inc. acquired 30% of the outstanding common stock of Wolf Co. for…

A: A company may invest in another company. The company reports the investment in another company as an…

Q: Prepare all of Spark's journal entries for 2024 to apply the equity method to this investment.

A: When the ownership percentage in other company is between 20% to 50%, then equity method of…

Q: On January 1 of the current year, Barger Company buys 150,000 shares of Booker, Incorporated’s…

A: Investment means an asset purchased in expectation of earning a return on such investment in future…

Q: On January 1, year 1, ABC Company purchased 80% of the stock of XYZ for P4,000,000 cash. Prior to…

A: GIVEN   On January 1, year 1, ABC Company purchased 80% of the stock of XYZ for P4,000,000 cash.…

Q: The DeBlois Family Co. acquired 40% of Orange Beach Co. with a $500,000 payment on January 1, 2023.…

A: Goodwill is the excess amount which is given to the shareholders of acquiree company in business…

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.