Kuphal Incorporated acquired 45% of Hoppe Ltd for $14,000,000 on January 1, 2023. The total fair value of Hoppe's identifiable net assets was $28,500,000 on that date, and the total book value of those net assets was $22,000,000. The difference between fair value and book value is attributed to a warehouse that has a remaining useful life of 8 years. During 2023, Hoppe recognized net income of $4,000,000 and paid dividends of $1,600,000. Hoppe had a fair value of $37,000,000 as of December 31, 2023. Prepare the journal entry to record the depreciation adjustment Kuphal will make in 2023 related to its investment in Hoppe?
Kuphal Incorporated acquired 45% of Hoppe Ltd for $14,000,000 on January 1, 2023. The total fair value of Hoppe's identifiable net assets was $28,500,000 on that date, and the total book value of those net assets was $22,000,000. The difference between fair value and book value is attributed to a warehouse that has a remaining useful life of 8 years. During 2023, Hoppe recognized net income of $4,000,000 and paid dividends of $1,600,000. Hoppe had a fair value of $37,000,000 as of December 31, 2023. Prepare the journal entry to record the depreciation adjustment Kuphal will make in 2023 related to its investment in Hoppe?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 11P
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Transcribed Image Text:Kuphal Incorporated acquired 45% of Hoppe Ltd for $14,000,000 on January 1, 2023. The total fair value
of Hoppe's identifiable net assets was $28,500,000 on that date, and the total book value of those net
assets was $22,000,000. The difference between fair value and book value is attributed to a warehouse
that has a remaining useful life of 8 years. During 2023, Hoppe recognized net income of $4,000,000 and
paid dividends of $1,600,000. Hoppe had a fair value of $37,000,000 as of December 31, 2023.
Prepare the journal entry to record the depreciation adjustment kuphal will make in 2023 related to its
investment in Hoppe?
Account
No Journal Entry Required
Debit
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