Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. placid lake corporation acquired 70 percent of the

Placid Lake Corporation acquired 70 percent of the outstanding voting stock of Scenic, Inc., on...

90.2K

Verified Solution

Question

Accounting

Placid Lake Corporation acquired 70 percent of the outstanding voting stock of Scenic, Inc., on January 1,2020, when Scenic had a net book value of $650,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $8,000 per year.
Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $550,000. Scenic reported net income of $360,000. Placid Lake declared $180,000 in dividends during this period; Scenic paid $65,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows:

Answer & Explanation Solved by verified expert
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!
Become a Member

Other questions asked by students