Reference no: EM13828266

1. On January 1, 2009, Davis acquires 30% of the outstanding common stock of Erdman for $800,000. Davis has significant influence. At that date, Erdman had assets with a hook %%Lie m $5,000,000 and liabilities with a book value of $3,000,000. Erdman also had equipment with% book value of $200,000 and a fair value of $500,000, with a remaining useful life of 5 years.thi 2009 Erdman has net income of $200,000 and pays dividends of $80,000. What is amount oiequity income recorded by Davis in 2009 ?

2. Tolson Corp owns 40% of the voting common shares of Ramos Corp and has significant influence. In 2010, Tolson buys inventory costing $100,000 from third parties and then sells Ramos for $150,000. At the end of 2010, Ramos still has $60,000 inventory on hand. What amount of unrealized gross profit must Tolson defer in 2010. Show the required entry and amounts.