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Question: assume that on january 1 2014 an investor company purchased...

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Assume an investee has the following financial statement information for the three years ending December 31, 2016: 2014 2015 $228,376 $222,160 $165,600 529,384 459,440 450,400 (At December 31) 2016 Current assets Tangible fixed assets Intangible assets 32,000 36,000 40,000 Total assets $789,760 $717,600 $656,000 Current liabilities Noncurrent liabilities Common stock $96,800 $88,000 $80,000 212,960 193,600 176,000 80,000 80,000 80,000 Additional paid-in capita 80,000 80,000 80,000 320,000 276,000 240,000 480,000 436,000 400,000 Total liabilities and equity $789,760 $717,600 $656,000 Retained earningS Stockholders equity 2014 2015 $776,000 $736,000 $680,000 700,800 672,000 620,000 $75,200 $64,000 $60,000 2016 (For the years ended December 31) Revenues Expenses Net income Dividends $31,200 $28,000 $20,000

Assume that on January 1, 2014, an investor company purchased 100% of the outstanding voting com- mon stock of the investee. On the date of the acquisition, the investee’s identifiable net assets had fair values that approximated their historical book values, except for tangible fixed assets, which had fair value that was $90,000 higher than the investee’s recorded book value. The tangible fixed assets had a remaining useful life of 6 years. In addition, the acquisition resulted in goodwill in the amount of $175,000 recognized in the consolidated financial statements of the investor company. Assuming that the investor company uses the equity method to account for its investment in the investee, what is the balance in the “income from investee” account in the investor company’s pre-consolidation income statement for the year ended December 31, 2016?

A. $75,200

B. $60,200

C. $44,000

D. $29,000

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