Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Davis acquires 100% of Ramos on January 1,2009 . Ramos will be operated as a separate subsidiary. Davis will use the equity method to

image text in transcribed

1. Davis acquires 100% of Ramos on January 1,2009 . Ramos will be operated as a separate subsidiary. Davis will use the equity method to account for its investment in Ramos. In 2013, Davis has net income of $400,000 and pays dividends of $100,000. Ramos has net income of $200,000 and pays dividends of $75,000. At acquisition date, Davis has a building with a book value of $3,000,000 and a fair value of $4,000,000. At that date, Ramos had a building with a book value of $800,000 and fair value of $900,000. Both buildings have a remaining useful life a. Prepare consolidation worksheet " D " to reflect the necessary adjustment for dividends of 1,500,00. b. How much are consolidated dividends for 2013 c. Prepare worksheet entry "A" at December 31, 2013 (assume there is no goodwill). d. How much is consolidated buildings at December 31, 2013

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Computers Electronics And High Tech Industry Irs Audit Techniques Guide

Authors: Internal Revenue Service

1st Edition

1304133834, 978-1304133830

More Books

Students also viewed these Accounting questions