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  3. problem 116 lo 13 1417 on january 1 2017 alison...

Question: problem 116 lo 13 1417 on january 1 2017 alison...

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Problem 1-16 (LO 1-3, 1-4,1-7) On January 1, 2017, Alison, Inc., paid $76,200 for a 40 percent interest in Holister Corporations common stock. This investee had assets with a book value of $249,000 and liabilities of $103,000. A patent held by Holister having a $8,800 book value was actually worth $34,300. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2017, Holister earned income of $46,200 and declared and paid dividends of $15,000. In 2018, it had income of $68,700 and dividends of $20,000. During 2018, the fair value of Allisons investment in Holister had risen from $89,980 to $98,760 a. Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31, 2018? b. Assuming Alison uses fair-value accounting, what income from the investment in Holister should be reported for 2018? Investment in Holister Investment income

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