Home / Questions / Posada Company acquired 7000 of the 10000 outstanding shares of Sabathia Company on Januar...
Posada Company acquired 7,000 of the 10,000 outstanding shares of Sabathia Company on January 1, 2013, for $840,000. The subsidiary’s total fair value was assessed at $1,200,000 although its book value on that date was $1,130,000. The $70,000 fair value in excess of Sabathia’s book value was assigned to a patent with a 5-year remaining life. On January 1, 2015, Posada reported a $1,085,000 equity method balance in the Investment in Sabathia Company account. On October 1, 2015, Posada sells 1,000 shares of the investment for $191,000. During 2015, Sabathia reported net income of $120,000 and declared dividends of $40,000. These amounts are assumed to have occurred evenly throughout the year.
a. How should Posada report the 2015 income that accrued to the 1,000 shares prior to their sale?
b. What is the effect on Posada’s financial statements from this sale of 1,000 shares?
c. How should Posada report in its financial statements the 6,000 shares of Sabathia it continues to hold?
Jul 22 2020 View more View Less
Suppose that the silicon used for the chips becomes unavailable for a period of time. Consequently, GFI cannot manufacture enough chips to fulfill the contract but does s...
Aug 02 2021Homework 1READ BEFORE YOU START: Solve each of the following question using 3 methods: pricing formulas, a financial calculator, and Excel. When calculating using the pri...
Aug 28 2020Casino Size and Revenue The New York Times published the sizes (square feet) and revenues (dollars) of seven different casinos in Atlantic City. Is there sufficient evide...
May 28 2021As the production manager, you need to minimize both ordering and inventory costs. You need to provide a recommendation of the optimal order quantity of raw materials to ...
Jun 03 2020Meetings are an essential part of conducting business and sharing information. Describe five meeting options (types) that might facilitate the information sharing needs o...
Jul 24 2020Identify four ways that pathogens are transmitted and give an example of each.
Nov 28 2019A piston-cylinder contains air at a pressure of 500 kPa. The piston movement is resisted by a spring and atmospheric pressure of 100 kPa. The air moves the piston andthe ...
Jun 05 2020The smallest unit of life is the ________.a. atomb. moleculec. celld. organism
Jun 02 2021Consider a situation where Ron (R) and Nancy (N) have demands for a private good that can be represented by the following functions: D_R: Q_R = 18-3P_R D_N: Q_N = 11 - 2P...
May 08 2021Problems are encountered at all levels in an organization, and managers at various levels have to solve them or manage them in the best possible way. Which of the followi...
Dec 21 2017