Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired.Demers earns income and pays dividends as follows: 2019 2020 2021Net income$100,000 $120,000 $130,000 Dividends 40,000 50,000 60,000 ??Assume the partial equity method is applied.?Compute Pell's investment in Demers at December 31, 2021.
A. $785,000.
B. $660,000.
C. $620,000.
D. $676,000.
E. $780,000.
Answer: B
You might also like to view...
Audit sampling is not used for which type of audit evidence?
A. Confirmation. B. Inquiry. C. Reperformance. D. Inspection of tangible assets.
Online social networks represent an important avenue to create buzz for marketers
Indicate whether the statement is true or false
Denzil was one of 50,000 people defrauded of $40 in an advertising scam. His best course of action to recover his money is to
a. mediate the claim with the advertiser. b. bring an individual lawsuit against the advertiser in a state appellate court. c. bring an individual lawsuit in a U.S. District Court. d. become part of a class action lawsuit, which might include plaintiffs who are unaware of the lawsuit or are even unaware they were harmed.
Which financial statement is (are) required for a voluntary health and welfare organization that is not required for a private, not-for-profit hospital?I. A statement of operations. II. A statement of functional expenses.
A. II only B. I only C. Neither I nor II D. Both I and II