On January 1, 2017, Larkspur Inc. paid $688,000 for 10,000 shares of Cullumber Companys voting common stock, which was a 10% interest in Cullumber. At that date, the net assets of Cullumber totaled $5,889,000. The fair values of all of Cullumbers identifiable assets and liabilities were equal to their book values. Larkspur does not have the ability to exercise significant influence over the operating and financial policies of Cullumber. Larkspur received dividends of $1.60 per share from Cullumber on October 1, 2017. Cullumber reported net income of $553,000 for the year ended December 31, 2017.

On July 1, 2018, Larkspur paid $2,325,000 for 30,000 additional shares of Cullumber Companys voting common stock which represents a 30% investment in Cullumber. The fair values of all of Cullumbers identifiable assets net of liabilities were equal to their book values of $6,495,000. As a result of this transaction, Larkspur has the ability to exercise significant influence over the operating and financial policies of Cullumber. Larkspur received dividends of $2.10 per share from Cullumber on April 1, 2018, and $2.50 per share on October 1, 2018. Cullumber reported net income of $650,000 for the year ended December 31, 2018, and $353,000 for the 6 months ended December 31, 2018.

(For both purchases, assume any excess of cost over book value is due to goodwill.)

CALCULATOR PRINTER VERSION BACK Problem 22-11 On January 1, 2017, Larkspur Inc. paid $688,000 for 10,000 shares of Cullumber Company's voting common stock, which was a 10% interest in Cullumber. At that date, the net assets of Cullumber totaled $5,889,000. The fair values of all of Cullumber's identifiable assets and liabilities were equal to their book values. Larkspur does not have the ability to exercise significant influence over the operating and financial policies of Cullumber. Larkspur received dividends of $1.60 per share from Cullumber on October 1, 2017. Cullumber reported net income of $553,000 for the year ended December 31, 2017 On July 1, 2018, Larkspur paid $2,325,000 for 30,000 additional shares of Cullumber Company's voting common stock which represents a 30% investment in Cullumber. The fair values of all of Cullumber's identifiable assets net of liabilities were equal to their book values of $6,495,000. As a result of this transaction, Larkspur has the ability to exercise significant influence over the operating and financial policies of Cullumber. Larkspur received dividends of $2.10 per share from Cullumber on April 1, 2018, and $2.50 per share on October 1, 2018. Cullumber reported net income of $650,000 for the year ended December 31, 2018, and $353,000 for the 6 months ended December 31, 2018. (For both purchases, assume any excess of cost over book value is due to goodwill.) (a) Prepare a schedule showing the income or loss before income taxes for the year ended December 31, 2017, that Larkspur should report from its investment in Cullumber in its income statement issued in March 2018. LARKSPUR INC. Schedule of lacemar less from lavimai (b) During March 2019, Larkspur issues comparative financial statements for 2017 and 2018. Prepare schedules showing the income or loss before income taxes for the years ended December 31, 2017 and 2018, that Larkspur should report from its investment in Cullumber. LARKSPUR INC. Schedule of Income or Loss from Investment 2018 2017 Click if you would like to show Work for this question: Open Show Work LINK TO TEXT