yCo, Inc., holds 24 percent of the outstanding shares of Marqueen Company and appropriately applies the equity method of counting. Excess cost amortization (related to a patent) associated with this investment amounts to $10,000 per year. For 2020, arqueen reported earnings of $115,000 and declares cash dividends of $30,000. During that year, Marqueen acquired inventory for 1,000, which it then sold to BuyCo for $85,000. At the end of 2020, BuyCo continued to hold merchandise with a transfer price of 29,000. What Equity in Investee Income should BuyCo report for 2020? How will the intra-entity transfer affect BuyCo's reporting in 2021? If BuyCo had sold the inventory to Marqueen, would the answers to (a) and (b) have changed? or all requirements, do not round intermediate calculations.)
yCo, Inc., holds 24 percent of the outstanding shares of Marqueen Company and appropriately applies the equity method of counting. Excess cost amortization (related to a patent) associated with this investment amounts to $10,000 per year. For 2020, arqueen reported earnings of $115,000 and declares cash dividends of $30,000. During that year, Marqueen acquired inventory for 1,000, which it then sold to BuyCo for $85,000. At the end of 2020, BuyCo continued to hold merchandise with a transfer price of 29,000. What Equity in Investee Income should BuyCo report for 2020? How will the intra-entity transfer affect BuyCo's reporting in 2021? If BuyCo had sold the inventory to Marqueen, would the answers to (a) and (b) have changed? or all requirements, do not round intermediate calculations.)
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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