Question
Cale Investment in Subsidiary On January 1, 2017, Cale Corp. paid $1,020,000 to acquire Kaltop Co. Kaltop maintained separate incorporation. Cale used the equity method
Cale Investment in Subsidiary
On January 1, 2017, Cale Corp. paid $1,020,000 to acquire Kaltop Co. Kaltop maintained separate incorporation. Cale used the equity method to account for the investment. The following information is available for Kaltop's assets, liabilities, and stockholders' equity accounts on January 1, 2017:
|
| Book Value | Fair Value |
| Current assets | $120,000 | $120,000 |
| Land | $72,000 | $192,000 |
| Building (20 year life) | $240,000 | $268,000 |
| Equipment (10 year life) | $540,000 | $516,000 |
| Current Liabilities | $24,000 | $24,000 |
| Long-Term Liabilities | $120,000 | $210,000 |
| Common Stock | $228,000 |
|
| Additional Paid in Capital | $384,000 |
|
| Retained Earnings | $216,000 |
|
What is the balance in Cale's investment in subsidiary account at the end of 2017?
Multiple Choice
$1,099,000
$1,020,000
$1,096,000
$1,098,000
$1,144,000
can someone answer this question?
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CPA Comprehensive Exam Review Auditing And Attestation
Authors: Nathan M. Bisk
43rd Edition
088128095X, 978-0881280951
