What would be the balance in Perry Investment

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Reference no: EM132760599

Problem - On January 1, 2019 Perry Inc. purchased 54,000 voting shares out of Bramble Inc's 90,000 outstanding voting shares $240,000. On that date, Bramble's common shares and retained earnings were valued at $60,000 and $90,000 resp Bramble's book values approximated its fair values on the acquisition date with the exception of the company's equ which was estimated to have a fair value that was $50,000 in excess of its recorded book value. The equipment was to have a useful life of eight years. Both companies use straight line amortization exclusively. On January 1, 2020, Perry purchased an additional 9,000 shares of Bramble Inc. on the open market for $45,000. Per the equity method to account for its investment in Bramble Inc. Bramble's net income and dividends for 2019 and 2020 are as follows:

	2019	2020
Net Income	$60,000	$80,000
Dividends	$9,000	$14,000

Required -

1. What is Perry's ownership interest in Bramble after its purchase on January 1, 2020?

2. What would be the balance in Perry's Investment in Bramble' account on December 31, 2019?

Reference no: EM132760599

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