Subsidiary reported net income

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Question: On January 1, 2020, Seager, Inc., acquired 90 percent of Semien Company in exchange for $1,225,000 fair-value consideration. The total fair value of Starr Company was assessed at $1,300,000. Seager computed annual excess fair-value amortization of $10,000 based on the difference between Semien's total fair value and its underlying book value. The subsidiary reported net income of $75,000 in 2020 and $95,000 in 2021 with dividend declarations of $35,000 each year. Apart from its investment in Semien, Seager had net income of $240,000 in 2020 and $280,000 in 2021.

Reference no: EM133611023

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