Patty Corporation acquired 100 percent of Oliver Company's outstanding common stock on January 1, 2021 for $639,000 in cash. Oliver reported net assets with a carrying amount of $374,000 at that time. Some of Oliver's assets either were unrecorded (having been internally developed) or had fair values that differed from book values as follows: Trademarks (indefinite life) Customer relationships (5-year remaining life) Equipment (10-year remaining life) S Book Fair Values Values 101,50 $249,50 0 0 364.00 0 0 91,200 323,80 0 Any goodwill is considered to have an indefinite life with no impairment charges during the year. Assume Patty applies the equity method to account for its investment in Oliver. In year 2021, Oliver reported net income of $350,600 and declared dividend of $98,000. The amount of Equity in Oliver Earnings reported on Patty's financial record before consolidation would be: O $350.600 O $328,340 Ⓒ$252.600 O $336,380
Patty Corporation acquired 100 percent of Oliver Company's outstanding common stock on January 1, 2021 for $639,000 in cash. Oliver reported net assets with a carrying amount of $374,000 at that time. Some of Oliver's assets either were unrecorded (having been internally developed) or had fair values that differed from book values as follows: Trademarks (indefinite life) Customer relationships (5-year remaining life) Equipment (10-year remaining life) S Book Fair Values Values 101,50 $249,50 0 0 364.00 0 0 91,200 323,80 0 Any goodwill is considered to have an indefinite life with no impairment charges during the year. Assume Patty applies the equity method to account for its investment in Oliver. In year 2021, Oliver reported net income of $350,600 and declared dividend of $98,000. The amount of Equity in Oliver Earnings reported on Patty's financial record before consolidation would be: O $350.600 O $328,340 Ⓒ$252.600 O $336,380
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 8MC
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![Patty Corporation acquired 100 percent of Oliver Company's outstanding common stock on January 1, 2021 for $639,000 in cash. Oliver reported net assets with a carrying amount of
$374,000 at that time. Some of Oliver's assets either were unrecorded (having been internally developed) or had fair values that differed from book values as follows:
Trademarks (indefinite life)
Customer relationships (5-year remaining life)
Equipment (10-year remaining life)
$
Book
Values
101,50
0
0
364,00
0
Fair
Values
249,50
0
91,200
323,80
0
Any goodwill is considered to have an indefinite life with no impairment charges during the year. Assume Patty applies the equity method to account for its investment in Oliver. In year
2021, Oliver reported net income of $350,600 and declared dividend of $98,000. The amount of Equity in Oliver Earnings reported on Patty's financial record before consolidation would be:
O $350.600
O $328,340
Ⓒ$252,600
O $336.380](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd7a714a4-ebd8-4877-b945-31460b45f9c3%2F735d0c65-7ded-4697-85c9-540263eac8d3%2Fzahc3qn_processed.png&w=3840&q=75)
Transcribed Image Text:Patty Corporation acquired 100 percent of Oliver Company's outstanding common stock on January 1, 2021 for $639,000 in cash. Oliver reported net assets with a carrying amount of
$374,000 at that time. Some of Oliver's assets either were unrecorded (having been internally developed) or had fair values that differed from book values as follows:
Trademarks (indefinite life)
Customer relationships (5-year remaining life)
Equipment (10-year remaining life)
$
Book
Values
101,50
0
0
364,00
0
Fair
Values
249,50
0
91,200
323,80
0
Any goodwill is considered to have an indefinite life with no impairment charges during the year. Assume Patty applies the equity method to account for its investment in Oliver. In year
2021, Oliver reported net income of $350,600 and declared dividend of $98,000. The amount of Equity in Oliver Earnings reported on Patty's financial record before consolidation would be:
O $350.600
O $328,340
Ⓒ$252,600
O $336.380
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