On January 1, 2022, Integrity Co. purchased 100% of Accountability's common stocks for $720,000. On...
90.2K
Verified Solution
Link Copied!
Question
Accounting
On January 1, 2022, Integrity Co. purchased 100% of Accountability's common stocks for $720,000. On that date, Accountability had paid-in capital of $100,000 and retained earnings of $420,000. Equipment and land were each undervalued by $50,000 on Accountabilitys books. The equipment has a remaining useful life of five years. Accountability reported Net Income $68,000 and paid dividends $23,000 during 2022. There were no other intercompany transactions between Integrity and Accountability.
Integrity uses the Equity Method to account for its investment in Accountability. Which of the following is correct?
Integrity's Equity Income on its investment in Accountability was $35,000 in 2022.
Integrity's Equity Income on its investment in Accountability was $68,000 2022.
Integrity's Equity Income on its investment in Accountability was $23,000 in 2022.
Integrity's Equity Income on its investment in Accountability was $58,000 in 2022.
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.