Homework Answers
Answer: $577,600
Explanation
| $ | |||
| Purchase price of Evan stock | 578,700.00 | ||
| Book value of Evan stock [($1,509,000 - $572,000) × 40%] | (374,800.00) | ||
| Cost in excess of book value | 203,900.00 | ||
| Payment identified with undervalued | |||
| Remaining | Annual | ||
| $ | Life | amortization ($) | |
| Building ($274,750 × 40%) | 109,900.00 | 7 year | 15,700.00 |
| Trademark ($235,000 × 40%) | 94,000.00 | 10 year | 9,400.00 |
| Total | 203,900.00 | 25,100.00 | |
| $ | |||
| Investment purchase price | 578,700.00 | ||
| Basic income accrual ($180,000 × 40%) | 72,000.00 | ||
| Amortization (above) | (25,100.00) | ||
| Dividends declared ($120,000 × 40%) | (48,000.00) | ||
| Investment in Johnson | 577,600.00 |
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Franklin purchases 40 percent of Johnson Company on January 1 for $578,700. Although Franklin did not...
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Franklin purchases 40 percent of Johnson Company on January 1 for $593,400. Although Franklin did not use it, this acquisition gave Franklin the ability to apply significant influence to Johnson's operating and financing policies. Johnson reports assets on that date of $1,468,000 with liabilities of $545,000. One building with a seven-year remaining life life is undervalued on Johnson's books by $203,000. Also, Johnson's book value for its trademark (10-year life) is undervalued by $357,500. During the year, Johnson reports net...
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Problem 1-8 (LU 1-3, 1-4) 00 Franklin purchases 40 percent of Johnson Company on January 1 for $617,100. Although Franklin did not use it, this acquisition gave Franklin the ability to apply significant influence to Johnson's operating and financing policies. Johnson reports assets on that date of $1,515,000 with liabilities of $548,000. One building with a seven-year remaining life life is undervalued on Johnson's books by $243,250. Also, Johnson's book value for its trademark (10-year life) is undervalued by $332,500....
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Franklin purchases 40 percent of Johnson Company on January 1 for $593,400. Although Franklin did not use it, this acquisition gave Franklin the ability to apply significant influence to Johnson's operating and financing policies. Johnson reports assets on that date of $1,468,000 with liabilities of $545,000. One building with a seven-year remaining life life is undervalued on Johnson's books by $203,000. Also, Johnson's book value for its trademark (10-year life) is undervalued by $357,500. During the year, Johnson reports net...
Problem 1-8 (LU 1-3, 1-4) 00 Franklin purchases 40 percent of Johnson Company on January 1 for $617,100. Although Franklin did not use it, this acquisition gave Franklin the ability to apply significant influence to Johnson's operating and financing policies. Johnson reports assets on that date of $1,515,000 with liabilities of $548,000. One building with a seven-year remaining life life is undervalued on Johnson's books by $243,250. Also, Johnson's book value for its trademark (10-year life) is undervalued by $332,500....
Problem 1-8 (LU 1-3, 1-4) 00 Franklin purchases 40 percent of Johnson Company on January 1 for $617,100. Although Franklin did not use it, this acquisition gave Franklin the ability to apply significant influence to Johnson's operating and financing policies. Johnson reports assets on that date of $1,515,000 with liabilities of $548,000. One building with a seven-year remaining life life is undervalued on Johnson's books by $243,250. Also, Johnson's book value for its trademark (10-year life) is undervalued by $332,500....
8 to 11? could you also write a solution
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