Bowerbird Corporation purchased a 70% interest in Stage Corporation on June 1, 2006 at a purchase price of $390,400. On this date, Stage?s book values were equal to its fair values except for an unrecorded copyright, and its stockholders? equity consisted of $290,000 of Common Stock and $210,000 of Retained Earnings. All cost-book differentials were attributed to the copyright, which had an estimated economic life of ten years.
10) During 2006, Stage earned $120,000 of net income earned uniformly throughout the year and paid $6,000 of dividends on March 1 and another $6,000 on September 1.
The amortization expense recorded for the copyright in 2006 is:
$315.
$560.
$815.
$960.
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