Question
Problem #1 (25 points) On January 4, 2021, Culver Corp. acquired 35% of the outstanding common stock of Pine Co. for $2,100,000. This acquisition gave
Problem #1 (25 points) On January 4, 2021, Culver Corp. acquired 35% of the outstanding common stock of Pine Co. for $2,100,000. This acquisition gave Culver the ability to exercise significant influence over the investee. The book value of the acquired shares was $1,465,000. Any excess cost over the underlying book value was assigned to a copyright that was undervalued on Pines balance sheet. This copyright has a remaining useful life of ten years. For the year ended December 31, 2021, Pine reported net income of $382,000 and paid cash dividends of $123,000.
Required: Prepare a schedule to show the balance Culver should report as its Investment in Pine Co. at December 31, 2021.
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