On January 1, 20X8, Ramon Corporation acquired 80 percent of Tester Company's voting common stock for $300,000. At the time of the combination, Tester reported common stock outstanding of $200,000 and retained earnings of $110,000, and the fair value of the noncontrolling interest was $75,000. The book value of Tester's net assets approximated market value except for patents that had a market value of $40,000 more than their book value. The patents had a remaining economic life of five years at the date of the business combination. Tester reported net income of $40,000 and paid dividends of $10,000 during 20X8. What is the amount of Total Excess Depreciation that will be recorded for 20X8? Group of answer choices $6,000 $5,000 $8,000 $40,000
On January 1, 20X8, Ramon Corporation acquired 80 percent of Tester Company's voting common stock for $300,000. At the time of the combination, Tester reported common stock outstanding of $200,000 and retained earnings of $110,000, and the fair value of the noncontrolling interest was $75,000. The book value of Tester's net assets approximated market value except for patents that had a market value of $40,000 more than their book value. The patents had a remaining economic life of five years at the date of the business combination. Tester reported net income of $40,000 and paid dividends of $10,000 during 20X8. What is the amount of Total Excess Depreciation that will be recorded for 20X8? Group of answer choices $6,000 $5,000 $8,000 $40,000
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
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 8MC
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On January 1, 20X8, Ramon Corporation acquired 80 percent of Tester Company's voting common stock for $300,000. At the time of the combination, Tester reported common stock outstanding of $200,000 and
What is the amount of Total Excess
Group of answer choices
$6,000
$5,000
$8,000
$40,000
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