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yCo, Inc., holds 24 percent of the outstanding shares of Marqueen Company and appropriately applies the equity method of counting. Excess cost amortization (related to a patent) associated with this investment amounts to $10,000 per year. For 2020, arqueen reported earnings of $115,000 and declares cash dividends of $30,000. During that year, Marqueen acquired inventory for 1,000, which it then sold to BuyCo for $85,000. At the end of 2020, BuyCo continued to hold merchandise with a transfer price of 29,000. What Equity in Investee Income should BuyCo report for 2020? How will the intra-entity transfer affect BuyCo's reporting in 2021? If BuyCo had sold the inventory to Marqueen, would the answers to (a) and (b) have changed? or all requirements, do not round intermediate calculations.)

yCo, Inc., holds 24 percent of the outstanding shares of Marqueen Company and appropriately applies the equity method of counting. Excess cost amortization (related to a patent) associated with this investment amounts to $10,000 per year. For 2020, arqueen reported earnings of $115,000 and declares cash dividends of $30,000. During that year, Marqueen acquired inventory for 1,000, which it then sold to BuyCo for $85,000. At the end of 2020, BuyCo continued to hold merchandise with a transfer price of 29,000. What Equity in Investee Income should BuyCo report for 2020? How will the intra-entity transfer affect BuyCo's reporting in 2021? If BuyCo had sold the inventory to Marqueen, would the answers to (a) and (b) have changed? or all requirements, do not round intermediate calculations.)

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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BuyCo, Inc., holds 24 percent of the outstanding shares of Marqueen Company and appropriately applies the equity method of accounting. Excess cost amortization (related to a patent) associated with this investment amounts to $10,000 per year. For 2020, Marqueen reported earnings of $115,000 and declares cash dividends of $30,000. During that year, Marqueen acquired inventory for $51,000, which it then sold to BuyCo for $85,000. At the end of 2020, BuyCo continued to hold merchandise with a transfer price of $29,000. a. What Equity in Investee Income should BuyCo report for 2020? b. How will the intra-entity transfer affect BuyCo's reporting in 2021? c. If BuyCo had sold the inventory to Marqueen, would the answers to (a) and (b) have changed? (For all requirements, do not round intermediate calculations.) a. Equity in investee income b. Equity accrual for 2021 will be C. If BuyCo had sold the inventory to Marqueen, would your answers above change? by
Transcribed Image Text:BuyCo, Inc., holds 24 percent of the outstanding shares of Marqueen Company and appropriately applies the equity method of accounting. Excess cost amortization (related to a patent) associated with this investment amounts to $10,000 per year. For 2020, Marqueen reported earnings of $115,000 and declares cash dividends of $30,000. During that year, Marqueen acquired inventory for $51,000, which it then sold to BuyCo for $85,000. At the end of 2020, BuyCo continued to hold merchandise with a transfer price of $29,000. a. What Equity in Investee Income should BuyCo report for 2020? b. How will the intra-entity transfer affect BuyCo's reporting in 2021? c. If BuyCo had sold the inventory to Marqueen, would the answers to (a) and (b) have changed? (For all requirements, do not round intermediate calculations.) a. Equity in investee income b. Equity accrual for 2021 will be C. If BuyCo had sold the inventory to Marqueen, would your answers above change? by
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