Answers given. Please explain the calculations. The following information applies to Questions 38-40: On January 1,...
Answers given. Please explain the calculations.
The following information applies to Questions 38-40:
On January 1, 2019, Everlasting, Inc. purchased Comet Corporation for $650,000. On that date the net assets of Comet had a book value of $320,000, and book values were equal to fair values with the following exceptions:
FIFO Inventory --Undervalued, $30,000
Land--Undervalued, $10,000
Equipment (5 year life)--Undervalued, $75,000
Patent (5-year life)--Undervalued, $25,000
During 2019, Everlasting had income from its own operations of $220,000 and Comet had net income of $80,000.
38. What amount of 2019 Equity Income was recognized by Everlasting?
d. $30,000
39. What is 2019 consolidated net income?
a. $250,000
40. What amount of goodwill appeared on the consolidated balance sheet at December 31, 2019?
b. $190,000
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On January 1,...
On January 1, 2019, Everlasting, Inc. purchased Comet Corporation for $650,000. On that date the net...
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