Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sajeda Company acquired 90% of Tamara Company. On January 1, 2020 in exchange for cash. The book value of Tamara's individual assets and liabilities approximated

Sajeda Company acquired 90% of Tamara Company. On January 1, 2020 in exchange for cash. The book value of Tamara's individual assets and liabilities approximated their acquisition-date fair values. On the date of acquisition, Tamara reported the following:

Cash $ 350,000 Current Liabilities $ 120,000

Inventory 100,000

Plant Assets (net) 320,000 Common Stock 100,000

Property 500,000 Retained Earnings 1,050,000

Total Assets $1,270,000 Total Liab & Equity $ 1,270,000

During the year, Tamara Inc. reported $310,000 in net income and declared $15,000 in dividends. Sajeda Company reported $520,000 in net income and declared $25,000 in dividends. Sajeda accounts for their investment using the equity method.

What is Sajeda's balance in "Investment in Tamara Inc." prior to consolidation on December 31, 2020?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

HRD Score Card 2500 Based On HRD Audit

Authors: T V Rao

1st Edition

8178298368, 978-8178298368

More Books

Students also viewed these Accounting questions