Parrot Company purchased 90% of the outstanding voting shares of Sieger Company at the beginning of 2018 for $650,000. At the time of purchase, Song Company's total stockholders' equity amounted to $625,000. Income and dividend distributions for Sieger Company from 2018 through 2020 are as follows (please see the table below). Please use the complete equity method to record the Parrot company's investment. The difference between book value of equity acquired and the value implied by the purchase price was attributed solely to an excess of market over book values of depreciable assets, with a remaining life of 5 years. $ 2018 2019 2020 -55,000 35,000 Net income (loss) 63,500 52,500 Dividend Distribution 25,000 50,000 2020 -55,000 35,000 2018 2019 Net income (loss) 63,500 52,500 Dividend Distribution 25,000 50,000
Parrot Company purchased 90% of the outstanding voting shares of Sieger Company at the beginning of 2018 for $650,000. At the time of purchase, Song Company's total stockholders' equity amounted to $625,000. Income and dividend distributions for Sieger Company from 2018 through 2020 are as follows (please see the table below). Please use the complete equity method to record the Parrot company's investment. The difference between book value of equity acquired and the value implied by the purchase price was attributed solely to an excess of market over book values of depreciable assets, with a remaining life of 5 years. $ 2018 2019 2020 -55,000 35,000 Net income (loss) 63,500 52,500 Dividend Distribution 25,000 50,000 2020 -55,000 35,000 2018 2019 Net income (loss) 63,500 52,500 Dividend Distribution 25,000 50,000
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 14RE
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Transcribed Image Text:Parrot Company purchased 90% of the outstanding voting shares of Sieger Company at the beginning of 2018 for $650,000. At the time of purchase,
Song Company's total stockholders' equity amounted to $625,000. Income and dividend distributions for Sieger Company from 2018 through 2020 are
as follows (please see the table below).
Please use the complete equity method to record the Parrot company's investment. The difference between book value of equity acquired and the value
implied by the purchase price was attributed solely to an excess of market over book values of depreciable assets, with a remaining life of 5 years.
$
2018
2019
2020
Net income (Iloss)
63,500
52,500
-55,000
Dividend Distribution
25,000
50,000
35,000
$
2018
2019
2020
-55,000
35,000
Net income (Ioss)
63,500
52,500
Dividend Distribution
25,000
50,000
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