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 initial value method is applied.?Compute Pell's investment in Demers at December 31, 2021.
A. $625,000.
B. $676,000.
C. $500,000.
D. $620,000.
E. $592,400.
Answer: C
You might also like to view...
The deposit of cash directly at the bank to speed collections often involves the use of a lockbox
a. True b. False Indicate whether the statement is true or false
A mail panel consists of a large, nationally representative sample of businesses that have agreed to participate in periodic mail questionnaires and product tests
Indicate whether the statement is true or false
Answer the following statements true (T) or false (F)
1. The “sucker effect” occurs when people feel they are not valued by the team. 2. The most effective reward system for a team is to make it completely team-based and not reward individual performance. 3. Members are more likely to multitask during virtual meetings than in face-to-face ones. 4. Social support behaviors are not related to team performance. 5. Task support increases group cohesion and helps motivate team members.
The followership approach that suggests leadership results from an interaction of leading and following is reminiscent of which major leadership approach?
A. trait approach B. leader–member exchange C. authentic leadership D. behavioral approach