ZuoTi.Pro
Question

   Emily Corporation purchased all of Ace Company's common stock on January 1, 2020, for $1,000,000 cash. The...

   Emily Corporation purchased all of Ace Company's common stock on January 1, 2020, for $1,000,000 cash. The investee's stockholders' equity amounted to $400,000. The excess of $600,000 was due to an unrecorded patent with a six-year life. In 2020, Ace reported net income of $250,000 and paid dividends of $25,000.

For 2020, what amount of Equity Income will Emily record? How to get the answer of 1,125,000

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Calculation of Equity Income: Income Less: Dividends Net Equity Income $ $ 250,000.00 (25,000.00) 225,000.00 Calculation of B

0 0
Add a comment
Know the answer?
Add Answer to:
   Emily Corporation purchased all of Ace Company's common stock on January 1, 2020, for $1,000,000 cash. The...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Emily Corporation purchased all of Ace Company's common stock on January 1, 2020, for $1,000,000 cash....

    Emily Corporation purchased all of Ace Company's common stock on January 1, 2020, for $1,000,000 cash. The investee's stockholders' equity amounted to $400,000. The excess of $600,000 was due to an unrecorded patent with a six-year life. In 2020, Ace reported net income of $250,000 and paid dividends of $25,000. For 2020, what amount of Equity Income will Emily record? $150,000 $125,000    $175,000    $825,000          Assume the facts in Question 27. What is the Equity Investment...

  • snihoqsR emoani bnaibo F143 (LO 1) On January 1, 2020, Frontier Corporation had $1,000,000 of common...

    snihoqsR emoani bnaibo F143 (LO 1) On January 1, 2020, Frontier Corporation had $1,000,000 of common stock outstanding la was issued at par. It also had retained earnings of $750,000. The company issued 40,000 shares of Journ common stock at par on July 1 and earned net income of $400,000 for the vear. 0,001o ouai ni Inosn Instructions Journalize the declaration of a 15% stock dividend on December 10, 2020, for the following independent assumptions. a. Par value is $10,...

  • e tatce sheet. DO IT! 11.4b (LO 4) On January 1, 2020, Vahsholtz Corporation purchased 5,000...

    e tatce sheet. DO IT! 11.4b (LO 4) On January 1, 2020, Vahsholtz Corporation purchased 5,000 shares of treasury stock. Other information regarding Vahsholtz Corporation is provided as follows. S200 eturn on stock-holders discuss changes. 2019 2020 Net income O Dividends on preferred stock $100,000 $ 30,000 $ 20,000 $110,000 S 30,000 $ 25,000 Dividends on common stock Weighted-average number of common shares outstanding Common stockholders' equity beginning of year Common stockholders' equity end of 50,000 45,000 $750,000 $830,000 $600,000...

  • Huey Company acquires 100% of the stock of Solar Corporation on January 1, 2019, for $2,400,000...

    Huey Company acquires 100% of the stock of Solar Corporation on January 1, 2019, for $2,400,000 cash. As of that date Solar had the following account balances: Book Value Fair value Cash $300,000 $300,000 Accounts receivable 325,000 325,000 Inventory 350,000 $400,000 Building-net (10 year life) 1,000,000 900,000 Equipment-net (5 year life) 300,000 400,000 Land 600,000 900,000 Accounts Payable 125,000 125,000 Bonds Payable (Face amount $1,000,000; due 12/31/2023) 2,000,000 2,050,000 Common stock 700,000 Additional paid-in capital 250,000 Retained earnings 880,000 In...

  • On January 1, 2013, Pallor Inc. purchased 40% of the outstanding stock of Saska Company for...

    On January 1, 2013, Pallor Inc. purchased 40% of the outstanding stock of Saska Company for $300,000. At that time, Saska's stockholders' equity consisted of $270,000 common stock and $330,000 of retained earnings. Saska Corporation reported net income of $360,000 for 2013. The allocation of the $60,000 excess of cost over book value acquired is shown below, along with information relating to the useful lives of the items: Overvalued receivables (collected in 2013) Undervalued inventories (sold in 2013) Undervalued building...

  • Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1, for $636,200...

    Patrick Corporation acquired 100 percent of O'Brien Company's outstanding common stock on January 1, for $636,200 in cash. O'Brien reported net assets with a carrying amount of $353,000 at that time. Some of O'Brien's assets either were unrecorded (having been internally developed) or had fair values that differed from book values as follows: Trademarks (indefinite life) Customer relationships (5-year remaining life) Equipment (10-year remaining life) Book Values $ 90,500 0 369,000 Fair Values $ 255,500 85,200 320,100 Any goodwill is...

  • On January 1, 2020, Case Corporation purchased 3,000 of the 10,000 outstanding shares of common stock...

    On January 1, 2020, Case Corporation purchased 3,000 of the 10,000 outstanding shares of common stock of Dow Corporation for $28,000 cash. At that date, Dow's balance sheet reflected the following book values. Assets not subject to depreciation . Assets subject to depreciation .. Liabilities. ........ Common stock (par $4) ........ Retained earnings, $10,000..... $25,000* 30,000** 5,000* 40,000 10,000 * Same as fair value. ** Fair value $38,000; the assets have a 10-year remaining useful life (straight-line depreciation). Dow Corporation...

  • On January 1, 2019, Biscayne Corporation purchased 80% of Arches corporation for $1,000,000. On December 31,...

    On January 1, 2019, Biscayne Corporation purchased 80% of Arches corporation for $1,000,000. On December 31, 2019, Biscayne reports revenues of $800,000 and expenses of $450,000, and Arches reports revenues of $600,000 and expenses of $400,000. The parent figures contain no income from the subsidiary. The annual excess fair-value amortization is $40,000. On the consolidated financial statements, what is the income attributable to the noncontrolling party? 200,000 160,000 40,000 32,000 0

  • On January 1, 2020, Allen Corporation purchased 30% of the 15,000 outstanding common shares of Towne...

    On January 1, 2020, Allen Corporation purchased 30% of the 15,000 outstanding common shares of Towne Corporation at $15 per share as a long-term investment. On the date of purchase, the book value and the fair value of the net assets of Towne Corporation were equal. During the year, Towne Corporation reported net income of $12,000. Towne Corporation declared and paid cash dividends of $4,000 on December 30, 2020, to shareholders on record. As of December 31, 2020, common shares...

  • 37 On January 2, 2021, Barley Corp. purchased 40% of the voting common stock of Wheat...

    37 On January 2, 2021, Barley Corp. purchased 40% of the voting common stock of Wheat Co., paying $3,000,000. Barley properly accounts for this investment using the equity method. At the time of the investment, Wheat's total stockholders' equity was $5,000,000. Barley gathered the following information about Wheat's assets and liabilities whose book values and fair values differed: Book Value Fair Value Buildings (20-year life) $1,000,000 $1,800,000 Equipment (5-year life) 1,500,000 2,000,000 Franchises (10-year life) 0 700,000 Any excess of...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT