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yulyashka [42]
3 years ago
13

On January 1, 20X8, Polo Corporation acquired 75 percent of Stallion Company's voting common stock for $300,000. At the time of

the combination, Stallion reported common stock outstanding of $200,000 and retained earnings of $150,000, and the fair value of the noncontrolling interest was $100,000. The book value of Stallion's net assets approximated market value except for patents that had a market value of $50,000 more than their book value. The patents had a remaining economic life of ten years at the date of the business combination. Stallion reported net income of $40,000 and paid dividends of $10,000 during 20X8.
a) Provide the journal entries recorded by Polo at December 31, 20X8 on its book if it accounts for its investment in Stallion using equity method.

b) Provide all consolidation entries needed at December 31, 20X8, to prepare consolidated financial statements.
Business
1 answer:
lions [1.4K]3 years ago
6 0

Answer:

Explanation:

Base on the question been given to us, we can solve this using equity method as seen below

Investments in Polo = 300000+0.75*(40000-10000-5000*)

300000+0.75*(25000)

300000+18750

$318,750

Increase in value of Patent $50,000

Economic Life 10

Amortization $5,000

The $ 5000 would be reduced from the net income

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2 years ago
In a $1031 like-kind exchange, Rafael exchanges a business building that originally cost $346,800. On the date of the exchange,
Andreyy89

Answer:

A. $52,020

B. $0

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Explanation:

a. Computation of Rafael's realized gain on the exchange

Using this formula

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