Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / On January 1 2017 Ridge Road Company acquired 20 percent of the voting shares of Sauk Trai...

On January 1 2017 Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail Inc for $2700000 in cash. Both companies provide commercial Internet

On January 1, 2017, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc., for $2,700,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail s board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail s board which gave it the ability to significantly influence Sauk Trail s operating and investing activities. The January 1, 2017, carrying amounts and corresponding fair values for Sauk Trail s assets and liabilities follow: ____________________ Carrying Amount _______ Fair Value Cash and receivables ............$ 110,000 ...................$ 110,000 Computing equipment ..........5,000,000 ................ 5,700,000 Patented technology ............ 100,000 ................. 4,000,000 Trademark ........................ 150,000 ..................2,000,000 Liabilities .........................(185,000) .................(185,000) Also as of January 1, 2017, Sauk Trail s computing equipment had a seven-year remaining estimated useful life. The patented technology was estimated to have a three-year remaining useful life. The trademark s useful life was considered indefinite. Ridge Road attributed to goodwill any unidentified excess cost. During the next two years, Sauk Trail reported the following net income and dividends: __________

Apr 22 2020 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions