accounting

On January 1, 2013, an investor purchases 28,000 common shares of an investee at $12 (cash) per share. The shares represent 20% ownership in the investee. The investee's common stock does not have a readily determinable fair value. On January 1, 2013, the book value of the investee's assets and liabilities equals $900,000 and $200,000, respectively. On that date, the appraised fair values of the investee's identifiable net assets approximated the recorded book values, except for a customer list. On January 1, 2013, the customer list had a recorded book value of $0, an estimated fair value equal to $50,000 and a 5 year remaining useful life. During the year ended December 31, 2013, the investee company reported net income equal to $42,000 and dividends equal to $20,000.

Noncontrolling investment accounting (price different from book value)
Assume the investor does not exert significant influence over the investee. Determine the balance in the "Investment in Investee" account at December 31, 2013.

$336,000
$288,800
$280,000
$340,800
I chose 336,000 and would like to know if I am right

  1. 👍
  2. 👎
  3. 👁
  4. ℹ️
  5. 🚩

Respond to this Question

First Name

Your Response

Similar Questions

  1. math

    Given: 20,000 shares cumulative preferred stock ($2.25 dividend per share): 40,000 shares common stock. Dividends paid: 2013, $8,000; 2014, 0; and 2015, $160,000. How much will the preferred stockholders and the common

  2. Accounting

    As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000. The sales for January, February, and March were as follows: $120,000, $140,000 and $150,000. 20% of each month’s sales are for cash.

  3. accounting

    Perez Company began operations in 2009. Since then, it has reported the following gains and losses for its investments in trading securities on the income statement: 2009 2010 2011 Gains (losses) from sale of trading securities $

  4. FINANCE

    Below is a list of account balances for Currie Hospital as of December 31, 2013. Prepare a balance sheet as of December 31, 2013, in proper form. (Hint: You will need to compute the net assets account. Assume that all net assets

  1. math

    One company has $200,000 to distribute in dividends. There are 17,000 shares of preferred stock that earn dividends at $0.60 per share and 80,000 shares of common stock. How much per share does a common stockholder receive in

  2. accounting

    Finishing Touches has two classes of stock authorized: 8%, $10 par preferred and $1 par value common. The following transactions affect stockholders' equity during 2010, its first year of operations: January 2 Issue 100,000 shares

  3. accounting

    The Sneed Corporation issues 10,000 shares of $50 par value preferred stock for cash at $75 per share. The entry to record the transaction will consist of a debit to Cash for $750,000 and a credit or credits to:

  4. Cost Accounting

    The accounting records of Nu-tonics Inc., include the following information for the year ended December 31, 2013: Materials Inventory as at 1 January 2013 $ 20,000 Materials Inventory as at 31 December 2013 $ 24,000 Work in

  1. finance

    Sterling optical and Royal Optical both make glass frames and each is able to generate earnings before interest and taxes of $120,000.Debt @12% $600,000 Debt @12% $200,000, Common stock, $5 par 400,000 Common stock, $5 par

  2. math

    An investor purchases 75 shares at 37.90 a share, holds the stock for 150 days, and then sells the stock for 41.20 a share. Find the annual interest rate earned. principal under 3000 3000-10,000 over 10,000 commission 32+1.8% of

  3. record declaration and payment of cash dividend

    How are entries recorded for the declaration and payment of cash dividends. A Corportation has 50,000 shares of common stock outstanding. It declares a $2 per share cash d ividend on November 1 to stockholders of record on

  4. Accounting

    Sandhill’s shareholders’ equity consists only of common shares and retained earnings. Using the change in total shareholders’ equity calculated in above part, (50000) calculate the net income or loss for the year ended

View more similar questions or ask a new question.