Question 4 Answer saved Marked out of 1.43 F Flag question Accounting for the Equity Investment When Price Exceeds Book Value Assume an investor purchases all of the stock of the investee in a stock purchase for $3,600. The investee's balance sheet on the date of purchase is as follows: Accounts receivable $300 Mortgage payable 5300 Inventories Building 600 Total assets 2400 Stockholders' equity $3,300 Total liabilities and equity $3.300 3000 In this example, the amount paid (ie., $3,600) is $600 greater than the book value of the net assets of the investee (i.e., $3,000). Assume the additional $600 of purchase price relates to an unrecognized patent held by the investee that has a remaining useful life of 10 years on the acquisition date. We also assume, subsequent to the purchase, the investee reports net income of $600 and pays $180 in dividends to the investor. Required a. Provide the journal entry to recognize the Equity Income by the investor. b. Provide the journal entry to record the receipt of the dividend. c. Provide the journal entry to record the amortization of the patent asset. a. (to record equity income.) b. G (to record the receipt of dividends.) Debit 0 0 Credit 0 0 0 0 5:59 PM