Fair value of the patent from placids investment

Assignment Help Financial Accounting

Reference no: EM133496113

Case: On January 1, 20X4, Placid Corporation acquired a 40% interest in Superior Industries, a Canadian Corporation, for $811,900 when Superior's stockholders' equity consisted of 1,000,000 Canadian dollars (C$) capital stock and C$500,000 retained earnings. Superior's functional currency is the Canadian dollar and the books are kept in the same currency. The exchange rate at the time of the purchase was $1.15 per Canadian dollar. Any excess allocated to patents is to be amortized over 10 years.

A summary of changes in the stockholders' equity of Superior during 20X4 and related exchange rates follows:

Required: Determine the 6 following items:

1. Fair value of the patent from Placid's investment in Superior on January 1, 20X4 in U.S. dollars

2. Patent amortization for 20X4 in U.S. dollars

3. Unamortized patent at December 31, 20X4 in U.S. dollars

4. Equity adjustment from the patent in U.S. dollars

5. Income from Superior for 20X4 in U.S. dollars

6. Investment in Superior balance at December 31, 20X4 in U.S. dollars

Reference no: EM133496113

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