Advanced Accounting

On January 1, 2017, Ridge Road Company acquired 25 percent of the voting shares of Sauk Trail, Inc., for $3,700,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail's board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail's board which gave it the ability to significantly influence Sauk Trail's operating and investing activities The January 1, 2017, carrying amounts and corresponding fair values for Sauk Trail's assets and liabilities follow: Cash and receivables Computing equipment Patented technology Trademark Liabilities Carrying Amount Fair Value $160,000 160,000 6,500,000 4,100,000 2,100,00e 5,450,000 150,000 200,000 (235,000) (235,000) Also as of January 1, 2017, Sauk Trail's computing equipment had a seven-year remaining estimated useful life. The patented technology was estimated to have a four-year remaining useful life. The trademark's useful life was considered indefinite. Ridge Road attributed to goodwill any unidentified excess cost During the next two years, Sauk Trail reported the following net income and dividends Dividends Net IncomeDeclared 2017 1,900,000 200,000 216,000 2018 2,085,000 a. How much of Ridge Road's $3,700,000 payment for Sauk Trail is attributable to goodwill? b. What amount should Ridge Road report for its equity in Sauk Trail's earnings on its income statements for 2017 and 2018? c. What amount should Ridge Road report for its investment in Sauk Trail on its balance sheets at the end of 2017 and 2018? Complete this question by entering your answers in the tabs below Req A Req B and C How much of Ridge Road's $3,700,000 payment for Sauk Trail is attributable to goodwill? Goodwill