On January 1, 2020, Ridge Road Company acquired 25 percent of the voting shares of Sauk Trail, Inc., for $3,600,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail's board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail's board, which gave it the ability to significantly influence Sauk Trail's operating and investing activities. The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail's assets and liabilities follow: Carrying Amount Cash and receivables $ 155,000 155,000 Computing equipment 6,420,000 Patented technology 145,000 4,090,000 Liabilities (230,000) (230,000) Fair Value $ 5,405,000 Trademark 195,000 2,090,000 Also, as of January 1, 2020, Sauk Trail's computing equipment had a seven-year remaining estimated useful life. The patented technology was estimated to have a three-year remaining useful life. The trademark's useful life was considered indefinite. Ridge Road attributed to goodwill any unidentified excess cost. During the next two years, Sauk Trail reported the following net income and dividends: Dividends Declared $ 195,000 205,000 Net Income $1,890,000 2,075,000 2020 2021 a. How much of Ridge Road's $3,600,000 payment for Sauk Trail is attributable to goodwill? b. What amount should Ridge Road report for its equity in Sauk Trail's earnings on its income statements for 2020 and 2021? c. What amount should Ridge Road report for its investment in Sauk Trail on its balance sheets at the end of 2020 and 2021? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg A Reg B and C How much of Ridge Road's $3,600,000 payment for Sauk Trail is attributable to goodwill? Goodwill S 468.750 Reg A Req B and C > a. How much of Ridge Road's $3,600,000 payment for Sauk Trail is attributable to goodwill? b. What amount should Ridge Road report for its equity in Sauk Trail's earnings on its income statements for 2020 and 2021? c. What amount should Ridge Road report for its investment in Sauk Trail on its balance sheets at the end of 2020 and 2021? Answer is not complete. Complete this question by entering your answers in the tabs below. Req A Req B and C b. What amount should Ridge Road report for its equity in Sauk Trail's earnings on its income statements for 2020 and 2021? c. What amount should Ridge Road report for its investment in Sauk Trail on its balance sheets at the end of 2020 and 2021? 2020 2021 b. Equity in Sauk Trail's earnings Investment in Sauk Trail c
