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Home / Questions / .On December 31 2010 Celtic Inc. acquired a 24% interest in Romano Corp. for $100,000 and ...

.On December 31 2010 Celtic Inc. acquired a 24% interest in Romano Corp. for $100,000 and appropriately applied the equity method During 2010 Romano had net income of $400,000 and paid cash

.On December 31, 2010, Celtic Inc. acquired a 24% interest in Romano Corp. for $100,000 and appropriately applied the equity method. During 2010, Romano had net income of $400,000 and paid cash dividends of $50,000. How much will Celtic report for the year ending December 31, 2011 on its income statement? Show your work.

24.On January 1, 2010, Danner Company purchased all of the assets and assumed all of the liabilities of Clancy Company for cash of $80,000. Clancy’s balance sheet showed total assets of $120,000 and total liabilities of $70,000. The equipment had a fair market value on the same date of $10,000 instead of the $6,000 reported on the balance sheet. Calculate goodwill in connection with this business combination. Prepare the journal entry to record the combination.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25.On December 31, 2010, Rory Corp. acquired an 18% interest in Batson Corp. for $100,000 and appropriately applied the cost method. During 2011, Batson had net income of $200,000 and paid cash dividends of $50,000. On the last day of 2011, Rory sold one-half of its investment in Batson Corp. for $180,000. How much should Rory report on its income statement for the year ending December 31, 2011? Show your work.

26.York Corporation owns 25% of Carson, Inc. that it purchased on January 1, 2010, for $100,000. York uses the cost method for accounting for its investment in Carson, Inc. During 2010, Carson, Inc. paid a total of $45,000 of dividends and recorded income of $200,000. Determine how much York’s net income would differ if it used the equity method instead of the cost method.  Show your work.

 

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