Cardinal Company acquires an 80% interest in Huron Company common stock for $420,000 cash on January 1,
Question:
Cardinal Company acquires an 80% interest in Huron Company common stock for $420,000 cash on January 1, 2015. At that time, Huron Company has the following balance sheet:
Appraisals indicate that accounts are fairly stated except for the equipment, which has a fair value of $240,000 and a remaining life of five years. Any remaining excess is goodwill.
Huron Company experiences the following changes in retained earnings during 2015 and 2016:
Prepare a determination and distribution of excess schedule for the investment in Huron Company (a value analysis is not needed). Prepare journal entries that Cardinal Company would make on its books to record income earned and/or dividends received on its investment in Huron Company during 2015 and 2016 under the following methods: simple equity, sophisticated equity, and cost.
DistributionThe word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Step by Step Answer:
Advanced Accounting
ISBN: 978-1305084858
12th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng