Answer:
$728,000
Explanation:
Domingo, Inc acquire for 700,000 the 20% of Martes's Equity
book value:
3,900,000 assets - 900,000 liab = 3,000,000
20% = 600,000
The difference will be attribute to a patent which useful life is 10 years.
700,000 - 600,000 = 100,000
amortization: 100,000/10 = 10,000 per year
Martes Net income 170,000 x 20% = 42,000
Martes Net income 210,000 x 20% = 42,000
Martes dividends 70,000 x 20% = 14,000
Martes dividends 70,000 x 20% = 14,000
beginning balance 700,000
net income 34,000
net income 42,000
dividends (28,000)
amortization on patent <u> (20,000) </u>
net 728,000
