Please show all your work! (10 years useful life)

Davis acquires 100% of Ramos on January 1, 2009. Ramos will be operated as a separate subsidiary. Davis will use the equity method to account for its investment in Ramos. In 2013, Davis has a net income of $400,000 and pays dividends of $100,000. Ramos has a net income of $200,000 and pays dividends of $75,000. At the acquisition date, Davis has a building with a book value of $3,000,000 and a fair value of $4,000,000. At that date, Ramos had a building with a book value of $800,000 and a fair value of $900,000. Both buildings have a remaining useful life of 10 years (assume straight-line depreciation). At December 31, 2013, Davis had a book value (BV) of Building of 5,000,000 and fair value (FV) of 6,000,000. Ramos had a book value (BV) of Building of 2,000,000 and FV of 1,500,000.

Prepare worksheet entry "A" at December 31, 2013 (assume there is no goodwill).

DR CR

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