Renfroe, Inc. acquired 10% of Stanley Corporation on January 4, 2020, for $90,000 when the...
70.2K
Verified Solution
Link Copied!
Question
Accounting
Renfroe, Inc. acquired 10% of Stanley Corporation on January 4, 2020, for $90,000 when the book value of Stanley was $1,000,000. During 2020, Stanley reported net income of $215,000 and paid dividends of $50,000. The book value of the 10% investment was the same as the fair value of that investment when, on January 1, 2021, Renfroe purchased an additional 30% of Stanley for $325,000. Any excess of cost over book value is attributable to goodwill with an indefinite life. During 2021, Stanley reported net income of $320,000 and paid dividends of $50,000.
What is the balance in the Investment in Stanley Corporation on December 31, 2021?
rev: 03_17_2021_QC_CS-257653
Multiple Choice
$415,000.
$512,500.
$523,000.
$539,500.
$544,500.
The answer isn't $539,500 or $415,000.
Please show work. Thank you.
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: Zin AI - Your personal assistant for all your inquiries!
