On January 1, 2017, Mehan, Incorporated purchased 15,000 shares of Cook Company for $150,000 giving Mehan...

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On January 1, 2017, Mehan, Incorporated purchased 15,000 shares of Cook Company for $150,000 giving Mehan a 15% ownership of

business accounting

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Answer 1

Answer #1

Any Excess of cost over book value represents asset i.e. 25,000 (300,000 - (1,100,000 x 25%))

Income Distributed ($225,000 x 40%) $90,000

Less: Depreiciation (25,000/4) (6,250)

Income in 2018 $83,750

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Answer 2

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