Question
On April 1, 2024, BigBen Company acquired 30% of the shares of LittleTick, Incorporated BigBen paid $100,000 for t investment, which is $40,000 more than
On April 1, 2024, BigBen Company acquired
30%
of the shares of LittleTick, Incorporated BigBen paid
$100,000
for
t
investment, which is
$40,000
more than
30%
of the book value of LittleTick's identifiable net assets. BigBen attribute
$15,000
of the
$40,000
difference to inventory that will be sold in the remainder of 2024 , and the rest to goodwill. LittleTick recognized a total of
$20,000
of net income for 2024 , and paid total dividends for the year of
$10,000
; thes dividends were issued quarterly. BigBen's investment in LittleTick will affect BigBen's 2024 net income by:\ a loss of
$10,500
.\ earnings of
$4,500
.\ earnings of
$1,125
.\ earnings of
$3,450
.
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