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Marianna [84]
2 years ago
12

Abbott Inc. owns 30% of the outstanding voting shares of Berta Inc. On the date of acquisition, the fair value of Berta's equipm

ent with a remaining useful life of five years and no residual value exceeded its carrying value by $20,000. During the year after the acquisition, the undervalued equipment will _____ Abbott's investment revenue by _____.
Business
1 answer:
Vitek1552 [10]2 years ago
3 0

Answer: During the year after the acquisition, the undervalued equipment will exceed Abbott's investment revenue by $1,200.

Explanation:

Multiply the amount exceeded of its carrying value by the % shares owned by Abbott.

Then divide the result by the useful life value of Barta's equipments

= (20,000 x 30%) / 5

= $1,200

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