Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Milani, Inc., acquired 10 percent of Seida Corporation on January 1,2020 , for $186,000 and appropriately accounted for the investment using the fair-value method. On
Milani, Inc., acquired 10 percent of Seida Corporation on January 1,2020 , for $186,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2021, Milani purchased an additional 30 percent of Seida for $609,000 which resulted in significant influence over Seida. On that date, the fair value of Seida's common stock was $2,030,000 in total. Seida's January 1,2021 , book value equaled $1,880,000, although land was undervalued by $135,000. Any additional excess fair value over Seida's book value was attributable to a trademark with an eight-year remaining life. During 2021 , Seida reported income of $345,000 and declared and paid dividends of $100,000. Prepare the 2021 journal entries for Milani related to its investment in Seida. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1 Record acquisition of Seida stock. 2 Record the 40% income earned during period by Seida. 3 Record 2021 amortization for trademark excess fair value. 4 Record dividend declaration from Seida. 5 Record collection of dividend from investee
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