Homework Answers
Answer: $844,000
Explanation
| The 2017 purchase is reported using the equity method | |
| $ | |
| Purchase price of Evan stock | 718,000.00 |
| Book value of Evan stock ($1,320,000 × 40%) | (528,000.00) |
| Goodwill | 190,000.00 |
| Life of goodwill | indefinite |
| Annual amortization | 0 |
| The Investment in Evan Company balance (equity method) | |
| in Shalina's financial records On December 31, 2019 | |
| $ | |
| Cost on January 1, 2017 | 718,000.00 |
| 2017 Income accrued ($205,000 x 40%) | 82,000.00 |
| 2017 Dividend ($100,000 x 40%) | (40,000.00) |
| 2018 Income accrued ($205,000 x 40%) | 82,000.00 |
| 2018 Dividend ($100,000 x 40%) | (40,000.00) |
| 2019 Income accrued ($205,000 x 40%) | 82,000.00 |
| 2019 Dividend ($100,000 x 40%) | (40,000.00) |
| Investment in Evan On December 31, 2019 | 844,000.00 |
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