Question
On 1/1/2013, Company A acquired 30% of the outstanding common stock of Company B, for $100,000 cash. Company A now has the ability to exercise
On 1/1/2013, Company A acquired 30% of the outstanding common stock of Company B, for $100,000 cash. Company A now has the ability to exercise significant influence with the 30% of ownership. On acquisition date, Company B reports Total Assets at $300,000 and Total Liabilities at $50,000. Any excess of the cost over book value was attributed to a building that has a remaining useful life of 5 years. Company B reports income of $30,000 and dividends of $10,000 for year 2013; the income is $40,000 and dividends are $20,000 for year 2014. Present clear steps to compute the balance of A's Investment in B account as of 12/31/2014.
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