Question

On January 1, 2021, Bronson Co., a calendar-year entity, acquired 40% of Corbin Corp.’s common stock...

On January 1, 2021, Bronson Co., a calendar-year entity, acquired 40% of Corbin Corp.’s common stock for $1 million. It did not elect the fair value option for the investment. The purchase price was equal to the carrying amount of 40% of Corbin's net assets, which approximated their fair value. Corbin's earnings and cash dividend payments for 2021 and 2022 were as follows:

2021

2022

Earnings

$300,000

$400,000

Dividends

$90,000

$120,000

On December 31, 2022, the balance in the investment account reported by Bronson should be

Group of answer choices

A. $1,196,000

B. $1,280,000

C. $1,364,000

D. $1,490,000

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Correct Answer will be $1196000

Detial working for your easy refrence

Computation of balance of Investment Account'
Investment made in Corbin   $1,000,000.00
Share in Earning of Corbin Company
2021 ( 300000*40%) $120,000.00
2022 (400000*40%) $160,000.00
Less: Share in Dividend  
2021 (90000*40%) -$36,000.00
2022 (120000*40%) -$48,000.00
Balance in investment Account $1,196,000.00
Dear student kindly let me know, if you are having any doubt and please mark with positive rating.
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On January 1, 2015, KMA Corp. paid $400,000 cash to acquire 40% of the common shares...
On January 1, 2015, KMA Corp. paid $400,000 cash to acquire 40% of the common shares of JDL Corp. At the time of acquisition, the carrying value of JDL’s common shares was $250,000, and its retained earnings were $400,000. The fair values of the INA approximated their carrying values except for equipment whose fair value was $15,000 higher than its carrying value. The equipment has a six-year remaining useful life, and straight-line depreciation is used. The investment was found to...
9) On January 1, 2021, Mathers Corp. acquired a 35% interest in David Inc. for $275,000....
9) On January 1, 2021, Mathers Corp. acquired a 35% interest in David Inc. for $275,000. On that date, David’s balance sheet disclosed net assets of $400,000. During 2021, David reported net income of $120,000 and paid cash dividends of $37,000. Mathers sold inventory costing $45,000 to David during 2021 for $55,000. David used all of this merchandise in its operations during 2021. Any excess cost over fair value is attributable to an unamortized trademark with a 20-year remaining life....
9) On January 1, 2021, Mathers Corp. acquired a 35% interest in David Inc. for $275,000....
9) On January 1, 2021, Mathers Corp. acquired a 35% interest in David Inc. for $275,000. On that date, David’s balance sheet disclosed net assets of $400,000. During 2021, David reported net income of $120,000 and paid cash dividends of $37,000. Mathers sold inventory costing $45,000 to David during 2021 for $55,000. David used all of this merchandise in its operations during 2021. Any excess cost over fair value is attributable to an unamortized trademark with a 20-year remaining life....
1. On January 1, 20X5, AKM Corp. paid $450,000 cash to acquire 25% of the common...
1. On January 1, 20X5, AKM Corp. paid $450,000 cash to acquire 25% of the common shares of GKM Corp. At the time of acquisition, the carrying value of GKM’s common shares was $500,000, and its retained earnings were $1,200,000. The fair values of the identifiable net assets (INA) approximated their carrying values except for a patent whose fair value was $20,000 higher than its carrying value. The patent has a five-year remaining useful life, and straight-line depreciation is used....
Renz Co. acquired 80% of the voting common stock of Sogers Corp. on January 1, 2020....
Renz Co. acquired 80% of the voting common stock of Sogers Corp. on January 1, 2020. During 2020, Sogers had revenues of $2,900,000 and expenses of $2,400,000. The amortization of fair value allocations totaled $60,000 in 2020. Not including its investment in Sogers, Renz Co. had its own revenues of $5,800,000 and expenses of $3,200,000 for the year 2020. The noncontrolling interest's share of the earnings of Sogers Corp. for 2020 is calculated to be
On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $300,000 when K-Tech’s...
On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $300,000 when K-Tech’s book value was $400,000. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $200,000. At the acquisition date, K-Tech's trademark (10-year remaining life) was undervalued in its financial records by $60,000. Also, patented technology (5-year remaining life) was undervalued by $40,000. In 2020, K-Tech reports $30,000 net income and declares no dividends. At the end of 2021, the two...
1. Dodd Co. acquired 75% of the common stock of Wallace Corp. for $1,800,000. The fair...
1. Dodd Co. acquired 75% of the common stock of Wallace Corp. for $1,800,000. The fair value of Wallace’s net assets was $2,100,000, and the book value was $1,900,000. The noncontrolling interest shares of Wallace Corp. are not actively traded. What is the total amount of goodwill recognized at the date of acquisition? a. $0 b. $300,000 c. $200,000 d. $700,000 e. $100,000 2. When Valley Co. acquired 80% of the common stock of Coleman Corp., Coleman owned land with...
In 2018, Babcock Industries, a calendar year corporation, acquired a 10% interest in Caraway, Inc. for...
In 2018, Babcock Industries, a calendar year corporation, acquired a 10% interest in Caraway, Inc. for $65,000. Babcock appropriately used the fair value method to account for the investment.   At the beginning of 2021, Babcock acquired an additional 25% of the outstanding common stock of Caraway for $250,000. The following additional information is available at the date of purchase related to Caraway’s activity for the years 2018-2020: Cumulative dividends paid by Caraway                                                  $150,000 Cumulative income reported by Caraway                                             $400,000 Cumulative...
Yellow Company is a calendar-year firm with operations in several countries. At January 1, 2021, the...
Yellow Company is a calendar-year firm with operations in several countries. At January 1, 2021, the company had issued 43,000 executive stock options permitting executives to buy 43,000 shares of stock for $33. The vesting schedule is 20% the first year, 20% the second year, and 60% the third year (graded-vesting). The fair value of the options is estimated as follows: Vesting Date Amount Vesting Fair Value per Option Dec. 31, 2021 20 % $ 6 Dec. 31, 2022 20...
PAM Co. acquired all of the common stock of Sista Co. on January 1, 2017. As...
PAM Co. acquired all of the common stock of Sista Co. on January 1, 2017. As of that date, Sista had the following trial balance: Debit Credit Accounts payable $ 60,000 Accounts receivable $ 50,000 Additional paid-in capital 60,000 Buildings (net) (20-year life) 140,000 Cash and short-term investments 70,000 Common stock 300,000 Equipment (net) (8-year life) 240,000 Intangible assets (indefinite life) 110,000 Land 90,000 Long-term liabilities (mature 12/31/19) 180,000 Retained earnings, 1/1/17 120,000 Supplies 20,000 Totals $ 720,000 $ 720,000...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT