Reference no: EM133023034
Question - On January, 1 2019, Phoenix Co. acquired 100 percent of the outstanding voting shares of Sedona Inc. for $646,000 cash. At January 1, 2019, Sedona's net assets had a total carrying amount of $452,200. Equipment (eight-year remaining life) was undervalued on Sedona's financial records by $92,000. Any remaining excess fair over book value was attributed to a customer list developed by Sedona (four-year remaining life), but not recorded on its books. Phoenix applies the equity method to account for its investment in Sedona. Each year since the acquisition, Sedona has declared a $28,000 dividend. Sedona recorded net income of $87,000 in 2019 and $106,200 in 2020.
Selected account balances from the two companies' individual records were as follows:
Phoenix Sedona
2021 Revenues $591,000 $324,400
2021 Expenses 371,000 220,000
2021 Income from Sedona 67,450 -
Retained Earnings 12/31/21 337,450 218,600
On its December 31, 2021, consolidated balance sheet, what amount should Phoenix report for Sedona's customer list?
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