Friday 16 November 2012

Pardolate Corporation paid $200,000 for a 60% interest in Arthropod Inc on January 1, 2005, when Arthropod had Capital Stock of $200,000 and Retained Earnings of $100,000. Fair values of identifiable net assets were the same as recorded book values. During 2005, Arthropod had income of $30,000; declared dividends of $10,000 and paid $5,000 of dividends. On December 31, 2005, Pardolate will have Investment in Salem account of $240,000. Investment in Salem account of $218,000. Goodwill of $20,000. Dividends receivable of $3,000.

Pardolate Corporation paid $200,000 for a 60% interest in Arthropod Inc on January 1, 2005, when Arthropod had Capital Stock of $200,000 and Retained Earnings of $100,000. Fair values of identifiable net assets were the same as recorded book values. During 2005, Arthropod had income of $30,000; declared dividends of $10,000 and paid $5,000 of dividends. On December 31, 2005, Pardolate will have

Investment in Salem account of $240,000.

Investment in Salem account of $218,000.

Goodwill of $20,000.

Dividends receivable of $3,000.



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