What is the balance of the investment account in Cookie

Assignment Help Accounting Basics

Reference no: EM132837831

Question - On 1/1/2015, Choco paid $92,000 to acquire 10% of the voting common stock of Cookie. In 1/1/2016, Choco acquired additional 20% of the voting common stock of Cookie for $210,000.

Following is the financial information about Cookie.

Book value of net assets 1/1/2015 $800,000

Net income (2015) $180,000

Net income (2016) $210,000

Dividends (2015) $80,000

Dividends (2016) $100,000

Land undervalued 12/31/2015 $60,000

Land undervalued 12/31/2016 $70,000

All excess payment will be recorded using Trademark which has useful life of 9 years in 2016.

During the year, there was no fair market value adjustment for Cookie.

Q1: In 2015, what method should be used to record this investment?

Q2: What is the balance of the investment account in Cookie at 12/31/2015?

Q3: What is the journal entry to record for dividends paid by Cookie at 12/31/2015?

Q4: In 2016, after additional 20% acquisition of Cookie, what method should be used to record this investment for 2015 and 2016?

Q5: Calculate trademark in 2015 that will be recorded in 2016(if any).

Q6: Calculate annual amortization of under/overvalued asset and Trademark in 2015.

Reference no: EM132837831

Questions Cloud

Discuss an industry that could be disrupted by ai : Discuss an industry that could be disrupted by AI and explain the cause of that disruption. Provide a specific example to illustrate your ideas.

Identify at least three aspects of your workplace : What is a workaround? Identify a workaround (specific to technology used in a hospital setting) that you have used or perhaps seen someone else use.

What types of activities fall within csr strategy : What types of activities fall within your CSR strategy and what types of activities are excluded? Why? Discuss the potential implications

What rituals does your family practice when someone dies : Think for a while about cultural practices and how they affect health or illness in your own family. They may be difficult to identify as such at first.

What is the balance of the investment account in Cookie : During the year, there was no fair market value adjustment for Cookie. What is the balance of the investment account in Cookie

Baby boomers seek new ways to escape : Use the CSU Online Library and look up the article "Baby Boomers Seek New Ways to Escape" through the Wall Street Journal database

Do feel that tv advertising has lost power : Do you feel that TV advertising has lost its power? Television advertising has long been thought of as the most successful advertising medium

Develop strategies to implement a change project : In order to develop strategies to implement a change project, you must be able to answer these questions: why is change needed, and how will it affect.

What is thinslicing : Which stage of the decision-making process is most affected by the dimensions of social commerce? Explain the six sources of influence prevalent

User Account

All Pages