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I am having a hard time understanding how exactly to calculate the excess cost over book value ( the unrecorded patent) Rectangular 6.During January 2005,
I am having a hard time understanding how exactly to calculate the excess cost over book value ( the unrecorded patent)
Rectangular 6.During January 2005, Webb, Inc. acquired 30% of the outstanding common stock of Wilson Co. for $1,200,000. This investment gave Webb the ability to exercise significant influence over Wilson. Wilson's assets on that date were recorded at $6,400,000 with liabilities of $3,000,000. Any excess of cost over book value of Webb's investment was attributed to unrecorded patents having a remaining useful life of ten years. In 2005, Wilson reported net income of $600,000. For 2006, Wilson reported net income of $750,000. Dividends of $200,000 were paid in each of these two years. What was the reported balance of Webb's Investment in Wilson Co. at December 31, 2006Step by Step Solution
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