Required: On January 3, 2024, Matteson Corporation acquired 40 percent of the outstanding common stock of O'Toole Company for $1,379,000. This acquisition gave Matteson the ability to exercise significant influence over the investee. The book value of the acquired shares was $863,000. Any excess cost over the underlying book value was assigned to a copyright that was undervalued on its balance sheet. This copyright has a remaining useful life of 10 years. For the year ended December 31, 2024, O'Toole reported net income of $353,000 and declared cash dividends of $35,000. On December 31, 2024, what should Matteson report as its investment in O'Toole under the equity method? Investment
Required: On January 3, 2024, Matteson Corporation acquired 40 percent of the outstanding common stock of O'Toole Company for $1,379,000. This acquisition gave Matteson the ability to exercise significant influence over the investee. The book value of the acquired shares was $863,000. Any excess cost over the underlying book value was assigned to a copyright that was undervalued on its balance sheet. This copyright has a remaining useful life of 10 years. For the year ended December 31, 2024, O'Toole reported net income of $353,000 and declared cash dividends of $35,000. On December 31, 2024, what should Matteson report as its investment in O'Toole under the equity method? Investment
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On January 3, 2024, Matteson Corporation acquired 40 percent of the outstanding common stock of O'Toole Company for $1,379,000.
This acquisition gave Matteson the ability to exercise significant influence over the investee. The book value of the acquired shares
was $863,000. Any excess cost over the underlying book value was assigned to a copyright that was undervalued on its balance
sheet. This copyright has a remaining useful life of 10 years. For the year ended December 31, 2024, O'Toole reported net income of
$353,000 and declared cash dividends of $35,000. On December 31, 2024, what should Matteson report as its investment in O'Toole
under the equity method?
Investment
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