90% interest Peregrine Corporation acquired Corporation in 2004 at a time when Cliff's book values and fair values were equal to one another. On January 1, 2005, cliff sold a truck with a $45,000 book value to Peregrine for $90,000. Peregrine is depreciating the truck over 10 years using the straight-line method. Separate incomes for Peregrine and Cliff for 2005 were as follows: Peregrine cliff Sales $ 1,800,000 $ 1,050,000 45,000 Gain on sale of truck Cost of Goods Sold (750,000) (285,000)
90% interest Peregrine Corporation acquired Corporation in 2004 at a time when Cliff's book values and fair values were equal to one another. On January 1, 2005, cliff sold a truck with a $45,000 book value to Peregrine for $90,000. Peregrine is depreciating the truck over 10 years using the straight-line method. Separate incomes for Peregrine and Cliff for 2005 were as follows: Peregrine cliff Sales $ 1,800,000 $ 1,050,000 45,000 Gain on sale of truck Cost of Goods Sold (750,000) (285,000)
Chapter7: Corporations: Reorganizations
Section: Chapter Questions
Problem 43P
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Question
Compute for the Investment income from Cliff.
Transcribed Image Text:Peregrine Corporation acquired a 90% interest in cliff
Corporation in 2004 at a time when Cliff's book values and fair
values were equal to one another. On January 1, 2005, cliff
sold a truck with a $45,000 book value to Peregrine for
$90,000. Peregrine is depreciating the truck over 10 years
using the straight-line method. Separate incomes for Peregrine
and Cliff for 2005 were as follows:
cliff
Peregrine
1,800,000 $ 1,050,000
Sales
45,000
Gain on sale of truck
Cost of Goods Sold
Depreciation expense
Other expenses
Separate incomes
( 750,000)
( 450,000)
180,000)
420,000 $
( 285,000)
( 135,000)
(450,000)
225,000
-0)
$
S
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