.2 oints THESE FACTS ARE THE SAME AS FOR THE PREVIOUS PROBLEM EXCEPT THAT JOLLEY'S OWNERSHIP OF 20% OF TIGE DOES NOT GIVE THEM SIGNIFICANT INFLUENCE OVER TIGE AND THEREFORE THE EQUITY METHOD IS NOT APPROPRIATE On January 1, 20X1, Jolley Corp. paid $400,000 for 20% of the voting common stock of Tige Co. On January 1, 20x1, the total book value of Tige was $800,000 and the fair value of all assets and liabilities on Tige's books equals their book value except for a building which has a carrying value of $150,000 and a fair value of $225,000. The building's remaining useful life is ten years. The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill. Tige reported net income of $200,000 in 20X1. Tige paid cash dividends of $25,000 in 20X1. The fair value of Jolley's investment in Tige was $500,000 as of December 31, 20X1. Based on the above information and the fact that Jolley does not have significant influence over Tige, what is the effect of Jolley's investment in Tige Co. on Jolley's net income for the year ended December 31, 20X1? Show you work, label all amounts, and show the related calculations for those amounts. Journal entries are not required and will not be graded if provided. If you do prepare journal entries, these must be supplemented with a schedule showing how the requested amount was calculated in total. abote 40.000 .2 oints THESE FACTS ARE THE SAME AS FOR THE PREVIOUS PROBLEM EXCEPT THAT JOLLEY'S OWNERSHIP OF 20% OF TIGE DOES NOT GIVE THEM SIGNIFICANT INFLUENCE OVER TIGE AND THEREFORE THE EQUITY METHOD IS NOT APPROPRIATE On January 1, 20X1, Jolley Corp. paid $400,000 for 20% of the voting common stock of Tige Co. On January 1, 20x1, the total book value of Tige was $800,000 and the fair value of all assets and liabilities on Tige's books equals their book value except for a building which has a carrying value of $150,000 and a fair value of $225,000. The building's remaining useful life is ten years. The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill. Tige reported net income of $200,000 in 20X1. Tige paid cash dividends of $25,000 in 20X1. The fair value of Jolley's investment in Tige was $500,000 as of December 31, 20X1. Based on the above information and the fact that Jolley does not have significant influence over Tige, what is the effect of Jolley's investment in Tige Co. on Jolley's net income for the year ended December 31, 20X1? Show you work, label all amounts, and show the related calculations for those amounts. Journal entries are not required and will not be graded if provided. If you do prepare journal entries, these must be supplemented with a schedule showing how the requested amount was calculated in total. abote 40.000
