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36) Whine purchased 80% of the outstanding voting shares of Dine Inc. on December 31, 2020. The bala sheets of both companies on that date
36) Whine purchased 80% of the outstanding voting shares of Dine Inc. on December 31, 2020. The bala sheets of both companies on that date are shown below (after Whine acquired the shares): WHINE DINE Cash $250,00 $200,00 Accounts Receivable $450,00 $300,00 Inventory $500,00 $100,00 Investment in Dine Inc. $500,00 Land $140,00 Equipment (net $460,000 $200,000 Total Assets $2,300,000 5800,000 Current Liabilities $900,00 $200,00 Bonds Payable $500,00 $100,00 Common Shares $500,00 $200,00 Retained Earnings $400,000 $300,000 Total Liabilities and Equity $2,300,000 $800,000 Also on December 31, 2020 (after the financial statements appearing above had been prepared) Chom Inc., one of Whine's main competitors has agreed to acquire an equity interest in Dine Inc. As a result agreement, Dine Inc. would issue another 8,000 shares (over and above the 32,000 shares it currently outstanding) to Chompster for $20 per share. The acquisition differential on the date of acquisition was attributed entirely to equipment, which had remaining useful life of ten years from the date of acquisition. Whine Inc. uses the equity method to account for its investment in Dine Inc. There were no unrealized intercompany profits on December 31, 2020. What would be the amount of the unamortized acquisition differential on December 31, 2020? A) $125,000 B) $40,000 $80,000 D) $50,000 Answer: A
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