Question

On January 1, 2021, Pine Company owns 40 percent (52,000 shares) of Seacrest, Inc., which it purchased several years ago for $247,000. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2021, is $332,800 Excess patent cost amortization of $15 600 is still being recognized each year. During 2021. Seacrest reports net income of $414000 and a $156,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Pine sold 10,400 shares of Seacrest on August 1, 2021 for $121606 in cash. However, Pine retains the ability to significantly influence the investee. During the last quarter of 2020, Pine sold $53,000 in inventory (which it had originally purchased for only $31.800) to Seacrest. At the end of that fiscal year, Seacrest's inventory retained $18100 (at sales price) of this merchandise, which was subsequently sold in the first quarter of 2021 On Pine's financial statements for the year ended December 31, 2021, what income effects would be reported from its ownership in Seacrest? (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) SEACREST, INC.

Answer 1

polection! Calulation of equity Income Investee income acowal facem operatien. $414000 X 40%x7/19 0414800 x 3299x5/12 (Net-1) 96600 55200 151800 ressi Ampatization $15600 87112 $5660 X 80% XS/12. NAH2) 9100 5200 -14 300 Equity Recognition of Tsong by die Goeis porofit Remaining Inventory. - 12/31/2) Grobes poorfit % on puitginal Sale (1280/ 53000 Guess petit remaining in Enuo utory 18100 40% Deniessluip% 7940 40% 2896 Intora - Entity gross post it owcognised Equity Income in peacoust Tune $ 140.396 Note-1 Pine company the sold 20% of its total. Lielding in Seacrest Inc.de: 10400 shares. There Rene, balance holding often Selling would be 40%-467x20% = 32%

Note 2 qsince Pine company has sold 2.2/23f its holding theoropove, amoodization, expenses would be greceeded lepto 80% for last 5 months 36450 20800 157200 Other cembull hensike lose - Seavust In e. frcom 17.2021 to 8.8.2021 (156000X40%87112) From By 2021-to-12131-2021 (15.667 X 324.871123 Total compeichelive less Calculation of gain on sale Tin continente Beek value. of Inuestrout en company seacrest en!/ 12021 Investee Income accomal Thuastee other conßechenshie lex ($156680X48%8x7/12) Amortization expense Roga Recognition of Depouvod. Profit Investment in company sea cuest : Book value Percentage of inuestrhent soll Book value o Share being 30fd (326796X20%) Pooceeds from palel of shares Gain on sale of 2.000 shares of Seacrest Ine. $332800 96600 - 36400 - 9180 2896 $386796 20% 77359 121606 $44247 Natey liked the aneusert , please give an up-Vote, du will be quite encouraging for omby thank you!