Don't use AI Patty Corporation acquired 100 percent of Oliver Company's outstanding common stockon January 1, 20X1 for $639,000 in cash. Oliver reported net assets with a carryingamount of $374,000 at that time. Some of Oliver's assets either were unrecorded (havingbeen internally developed) or had fair values that differed from book values as follows:BookFairValuesValuesTrademarks (indefinite life) $ 101,500 $249,500Customer relationships (5-0 91,200year remaining life)Equipment (10-yearremaining life)364,000 323,800Any goodwill is considered to have an indefinite life with no impairment charges duringthe 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 beforeconsolidation would be:336,380328,340252,600350,600

Oliver's Net Income:Oliver reported net income for the year of $350,600.Dividends Paid:Oliver…

Answered: Patty Corporation acquired 100 percent…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

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Patty Corporation acquired 100 percent of Oliver Company's outstanding common stock on January 1, 20X1 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: Book Fair Values Values Trademarks (indefinite life) $ 101,500 $249,500 Customer relationships (5- 0 91,200 year remaining life) Equipment (10-year remaining life) 364,000 323,800 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: 336,380 328,340 252,600 350,600
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