Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

???? my work On January 1, 2017, Stream Company acquired 21 percent of the outstanding voting shares of Q-Video, Inc, for $620,000 Q-Video manufactures specialty

image text in transcribed

???? my work On January 1, 2017, Stream Company acquired 21 percent of the outstanding voting shares of Q-Video, Inc, for $620,000 Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $2.2 million and $600,000, respectively. A customer list compiled by Q-Video had an appraised value of $324,000, although it was not recorded on its books. The expected remaining life of the customer list was 5 years with a straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill. Q-Video generated net income of $282,000 in 2017 and a net loss of $100,000 in 2018. In each of these two years, Q-Video declared and paid a cash dividend of $10,000 to its stockholders. During 2017, Q-Video sold inventory that had an original cost of $84,000 to Stream for $168,000. Of this balance, $84,000 was resold to outsiders during 2017, and the remainder was sold during 2018. In 2018, Q-Video sold inventory to Stream for $184,000 This inventory had cost only $138,000. Stream resold $96,000 of the inventory during 2018 and the rest during 2019. For 2017 and then for 2018, compute the amount that Stream should report as income from its investment in Q-Video in its external financial statements under the equity method. (Enter your answers in whole dollars and not in millions. Do not round intermediate calculations.) 2017 of 2018 of

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

Step: 3

blur-text-image

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

A Concise Course On Auditing An Authoritative Text For Stakeholders

Authors: Onyuka Felix McDubus

1st Edition

3844395415, 978-3844395419

More Books

Students also viewed these Accounting questions