Question
Blackstone Inc. acquired 20% of the outstanding common stock of Hansen Inc. on December 21, 2015.The purchase price was $1,250,000 for 50,000 shares.Hansen Inc. declared
Blackstone Inc. acquired 20% of the outstanding common stock of Hansen Inc. on December 21, 2015.The purchase price was $1,250,000 for 50,000 shares.Hansen Inc. declared and paid an $0.80 per share cash dividend on June 30 and on December 31, 2015 Hansen Inc. reported net income of $730,000 for 2016.The fair value of Hansen Inc.'s stock was $27 per share at December 31, 2016.
What amount in the investment in securities should be reported on the balance sheets under each of these methods at December 31, 2016?What is the total net income reported in 2016 under each of these methods?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started