On January 1, 2017, Grand Haven, Inc., reports net assets of $933,650 although equipment (with a...
On January 1, 2017, Grand Haven, Inc., reports net assets of $933,650 although equipment (with a four-year remaining life) having a book value of $536,000 is worth $598,250 and an unrecorded patent is valued at $54,900. Van Buren Corporation pays $840,640 on that date to acquire an 80 percent equity ownership in Grand Haven. If the patent has a remaining life of nine years, at what amount should the patent be reported on Van Buren's consolidated balance sheet at December 31, 2018?
A) $34,160.
B) $38,430.
C) $48,800.
D) $42,700.
Homework Answers
| Patent fair value at January 1, 2017 | 54900 | |
| Less: Amortization for 2017 and 2018 | 12200 | =54900*2/9 |
| Patent reported amount December 31, 2018 | 42700 | |
| Option D $42,700 is correct |
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