Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Foxx Corporation acquired all of Greenburg Company's outstanding stock on January 1, 2019, for $646,000 cash. Greenburg's accounting records showed net assets on that date

image text in transcribedimage text in transcribed

Foxx Corporation acquired all of Greenburg Company's outstanding stock on January 1, 2019, for $646,000 cash. Greenburg's accounting records showed net assets on that date of $497,000, although equipment with a 10-year remaining life was undervalued on the records by $66,000. Any recognized goodwill is considered to have an indefinite life. Greenburg reports net income in 2019 of $119,000 and $100,500 in 2020. The subsidiary declared dividends of $20,000 in each of these two years. Account balances for the year ending December 31, 2021, follow. Credit balances are indicated by parentheses. Greenburg $ (652,000) 163,000 406,000 Revenues Cost of goods sold Depreciation expense Investment income Net income Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 Current assets Investment in subsidiary Equipment (net) Buildings (net) Land Total assets Liabilities Common stock Retained earnings Total liabilities and equity Foxx $ (868,000) 108,500 370,000 (20,000) $ (409,500) $(1,246,000) (409,500) 120,000 $(1,535,500) $ 305,000 646,000 1,088,000 968,000 674,000 $ 3,681,000 $(1,245,500) (900,000) (1,535,500) $(3,681,000) $ (83,000) $ (376,500) (83,000) 20,000 $ (439,500) $ 118,000 700,000 526,000 122,000 $ 1,466,000 $ (726,500) (300,000) (439,500) $(1,466,000 Complete this question by entering your answers in the tabs below. Rega Req B and C Reg D and E d. Determine parent's investment income for 2021 under partial equity method and equity method. e. What would be Foxx's balance for retained earnings as of January 1, 2021, if each of the following methods had been in use? d. Investment Income e. Retained Earnings Initial value method Partial equity method Equity method

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Belverd E. Needles

5th Edition

0395698022, 978-0395698020

More Books

Students also viewed these Accounting questions