ACC-690

Module 6-2

Quiz

Question # 12

Jans Inc, acquired all of the outstanding common stock of Tysk Corp. on January 1, 2011, for $ 372,000. Equipment with a 10 year life was undervalued on Tysk'sfinancial records by $ 46,000. Tysk also owned an unrecorded customer list with an assessed fair value of $ 67,000 an and estimated remaining life of five years. Tysk earned reported net income of $ 180,000 in 2011 and $ 216,000 in 2012. Dividends of $ 70,000 were paid in each of these two years. Selectedaccount balances as of December 31, 2013, for the two companies follows:

Jans Tysk

Revenues$ 1,080,000$ 840,000

Expenses 480,000 600,000

Investment income Not given 0

Retained earnings, 1/1/13 840,000 600,000

Dividends paid 132,000 70,000

If the equity method had been applied,what would be the investment in Tysk Corp. account balance within the records of Jans at the end of 2013?

0 $ 372,000

0 $ 612,100

0 $ 844,150

0 $ 744,000

0 $ 774,150