Tomato co. Purchased 40% of MU corp. On april 1,2017, for 500,000 when MU's book value was 1,260,000. On the date of acquisition, the market value of MU's net asset equaled their book values, except for the following: •MU's equipment has a fair value of 50,000 less than it's books value. The equip. Has a remaining useful life of 10 years. •MU's building has a fair value of 40,000 more than it's book value. The building has a remaining useful life of 20 years. MU's results of operation for 2017 and 2018 are as follows: •2017 net income 150,000 •2018 net loss 30,000 MU's cash dividends of 20,000 and 10,000 respectively for 2017 and 2018. Required: journal entries and balances for the following 1. Investment income 2017 2. Investment loss 2018 3. Investment Carrying value for 2017 and 2018
Tomato co. Purchased 40% of MU corp. On april 1,2017, for 500,000 when MU's book value was 1,260,000. On the date of acquisition, the market value of MU's net asset equaled their book values, except for the following: •MU's equipment has a fair value of 50,000 less than it's books value. The equip. Has a remaining useful life of 10 years. •MU's building has a fair value of 40,000 more than it's book value. The building has a remaining useful life of 20 years. MU's results of operation for 2017 and 2018 are as follows: •2017 net income 150,000 •2018 net loss 30,000 MU's cash dividends of 20,000 and 10,000 respectively for 2017 and 2018. Required:
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