Please do not give solution in image format thanku 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. Equipmentwas 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 togoodwill with an indefinite life. Based on an annual review, goodwill has not been impaired.Demers earns income and pays dividends as follows:2019$100,000NetincomeDividends 40,000Multiple ChoiceO $90,400.Assume the partial equity method is applied.How much does Pell record as Income from Demers for the year ended December 31, 2020?$89,000.$50,400.20212020$120,000$120,000 $130,000$96,000.50,00060,000

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Business

Accounting

How much does Pell record as Income from Demers for the year ended December 31, 2020?

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 15DQ

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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

Please do not give solution in image format thanku

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
$100,000
Net
income
Dividends 40,000
Multiple Choice
O $90,400.
Assume the partial equity method is applied.
How much does Pell record as Income from Demers for the year ended December 31, 2020?
$89,000.
$50,400.
2021
2020
$120,000
$120,000 $130,000
$96,000.
50,000
60,000

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