Exercise $4-5($Static$)$ Investment Income LO $4-1$

Plastic Company purchased $100$ percent of Spoon Company's voting common stock for $$648,000$ on January $1,20$X$4.$ At that date,

Spoon reported assets of $$690,000$ and liabilities of $$230,000.$ The book values and fair values of Spoon's assets were equal except

for land, which had a fair value $$108,000$ more than book value, and equipment, which had a fair value of $$80,000$ more than book

value. The remaining economic life of all depreciable assets at January $1,20$X$4,$ was five years. Spoon reported net income of $$68,000$

and paid dividends of $$34,000$ in $20$X$4.$

Required:

Compute the amount of investment income to be reported by Plastic for $20\backslash$times $4.$

Exercise $4-6($Static$)$ Determination of Purchase Price LO $4-1$

Player Corporation purchased $100$ percent of Scout Company's common stock on January $1,20$X$5,$ and paid $$28,000$ above book

value. The full amount of the additional payment was attributed to amortizable assets with a life of eight years remaining at January $1,$

$205.$ During $205$ and $20\backslash$times $6,$ Scout reported net income of $$33,000$ and $$6,000$ and paid dividends of $$15,000$ and $$12,000,$

respectively. Player uses the equity method in accounting for its investment in Scout and reported a balance in its investment account

of $$161,000$ on December $31,20$X$6.$

Required:

Compute the amount paid by Player to purchase Scout shares.