answers:

22: B

23: C

not sure how to get there, please show work.

22. Review of pre-consolidation equity method (controlling investment in affiliate, fair value differs from book value) Assume on January 1, 2017, an investor company purchased 100% of the outstanding voting common. stock of the investee. On the date of the acquisition, the investee's identifiable net assets had fair values that approximated their historical book values, except for tangible fixed assets, which had fair value that was $112,500 higher than the investee's recorded book value. The tangible fixed assets had a remaining useful life of 6 years. In addition, the acquisition resulted in goodwill in the amount of $218.750 recognized in the consolidated financial statements of the investor company. Assuming that the investor company uses the equity method to account for its investment in the investee, what is the balance in the "investment in investee" account in the investor company's pre-consolidation balance sheet on December 31,2019 ? a. $600,000 b. $875,000 c. $781,250 d. $986,250 23. Review of pre-consolidation equity method (controlling investment in affiliate, fair value differs from book value) Assume on January 1, 2017, an investor company purchased 100% of the outstanding voting common stock of the investee. On the date of the acquisition, the investee's identifiable net assets had fair values that approximated their historical book values, except for tangible fixed assets, which had fair value that was $112,500 higher than the investee's recorded book value. The tangible fixed assets had a remaining useful life of 6 years. In addition, the acquisition resulted in goodwill in the amount of $218,750 recognized in the consolidated financial statements of the investor company. Assuming that the investor company uses the equity method to account for its investment in the investee, what is the balance in the "income from investee" account in the investor company's pre-consolidation income statement for the year ended December 31, 2019? a. $95,000 b. $36,250 c. $76,250 d. $55,000