Martin purchased 80% of Lewis for $750,000 on January 1, 20x1. Martin's excess of cost over...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Martin purchased 80% of Lewis for $750,000 on January 1, 20x1. Martin's excess of cost over book value was $10,000. The excess due to undervalued equipment is to be amortized over four years. During 20x1, Lewis sold inventory for a profit of $8,000 to Martin which is still in their inventory at December 31, 20x1. During 20x2,Lewis sold to Martin inventory costing $40,000 for $50,000. At year end, 25% of that inventory is still on hand in the inventory of Martin. Lewis reported income of $200,000 in 20x2. For 20x2, using the equity method, record the profits from Lewis on the books of Martin. Dr. Cr. Martin purchased 80% of Lewis for $750,000 on January 1, 20x1. Martin's excess of cost over book value was $10,000. The excess due to undervalued equipment is to be amortized over four years. During 20x1, Lewis sold inventory for a profit of $8,000 to Martin which is still in their inventory at December 31, 20x1. During 20x2,Lewis sold to Martin inventory costing $40,000 for $50,000. At year end, 25% of that inventory is still on hand in the inventory of Martin. Lewis reported income of $200,000 in 20x2. For 20x2, using the equity method, record the profits from Lewis on the books of Martin. Dr. Cr.
Expert Answer:
Answer rating: 100% (QA)
Facts of Question 1 Martin acquired 80 of the stake of Lewis for 750000 2 Excess of cost over value ... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Posted Date:
Students also viewed these accounting questions
-
On January 1 20X1 Alpha Inc purchased 400000 95 bonds of Theta Limited The bonds pay interest annually every December 31 and would mature on December 31 20x5 The bonds were acquired to yield 1025...
-
Helene Gauthier invested $15 000 on January 1 in a partnership. She withdrew $2000 on June 1, withdrew a further $1500 on August 1, and reinvested $4000 on November 1. What was her average monthly...
-
A mortgage for $235 000 is amortized over 25 years. Interest is 4.6% p.a., compounded semiannually, for a 5-year term and payments are monthly. (a) Compute the monthly payment. (b) Compute the...
-
You are given the following information concerning Parrothead Enterprises: Calculate the company?s WACC. Debt: 13,000 6.4 percent coupon bonds outstanding, with 15 years to maturity and a quoted...
-
The information shown on the next page was taken from the annual manufacturing overhead cost budget of Marantha Company. Variable manufacturing overhead costs ........$33,000 Fixed manufacturing...
-
In Exercises 27 and 28, a QR factorization of A is given. Use it to find a least squares solution of Ax = b. 1. 2.
-
Eskimo Pie Corporation markets a broad range of frozen treats, including its famous Eskimo Pie ice cream bars. The following items were taken from a recent income statement and balance sheet. In each...
-
The Summit Manufacturing Company produces two products. One is a recreational whitewater kayak molded from plastic and designed to perform as a durable whitewater play boat. The other product is a...
-
On January 1 , 2 0 2 5 , Sheridan Corporation had 8 9 , 4 0 0 shares of $ 1 par value common stock issued and outstanding. During the year, the following transactions occurred: Mar. 1 Issued 1 0 4 ,...
-
Use the data contained in the case to estimate the postmerger cash flows for 2018 through 2022 assuming that Lafayette General Hospital is acquired by St. Benedict's Teaching Hospital. You have very...
-
In any program, bid data is key to determining success and guiding sustainment. Without metrics proving success would be impossible. Consider the Access to mental health telehealth program you...
-
As the world's leading free water refill app, mymizu connects people to 10,000+ water refill stations (water fountains and partner cafes, shops, hotels) across Japan and 200,000 globally. Using...
-
(a) What is the length of a simple pendulum that oscillates with a period of 1.8 s on Earth, where the acceleration due to gravity is 9.80 m/s2, and on Mars, where the acceleration due to gravity is...
-
A 1.0000x10 -11 m wavelength x-ray photon strikes an atom in an example of Compton scattering. The scattered photon has a wavelength of 1.0301x10 -11 m at an angle of 29 o from the initial direction....
-
Sale price per coupon book Candy Shop offers coupons in a coupon book to sell the speciality candy bars that normally sell for $1 a bar. The coupon books are sold for $8 and contain 20 coupons in a...
-
5. The Coca-Cola Company is a total beverage company with products sold in more than 200 countries and territories. The company's purpose is to refresh the world and make a difference with a...
-
WhaWhat is the relationship between creativity and innovation?t
-
Chris Zulliger was a chef at the Plaza Restaurant in the Snowbird Ski Resort in Utah. The restaurant is located at the base of a mountain. As a chef for the Plaza, Zulliger was instructed by his...
-
Explain why it is important to separately account for the principal and income of an estate and what happens if such assets are not adequate to satisfy demonstrative or general legacies.
-
Recover Rehabilitation Hospital has the following balances that are extracted from its December 31, 2019, trial balance: From the above information, prepare a statement of activities for the year...
-
Marsha Corporation purchases an 80% interest in the common stock of Transam Corporation on December 31, 2013, for $720,000, when Transam has the following condensed balance sheet: On the December 31,...
-
How does burnout differ from stress?
-
What is the difference between a primary emotion and a secondary emotion?
-
contrast role- and job-related causes of stress.
Study smarter with the SolutionInn App