Alex, Inc., buys 40 percent of Steinbart Company on January 1, 2010, for $530,000.The equity method of accounting is to be used.Steinbart's net assets on that date were $1.2 million.Any excess of cost over book value is attributable to a trade name with a 20-year remaining life.Steinbart immediately begins supplying inventory to Alex as follows: 11eb9247_5e69_3af3_a81e_3dad1a110b2e_SM1528_00 Inventory held at the end of one year by Alex is sold at the beginning of the next.Steinbart reports net income of $80,000 in 2010 and $110,000 in 2011 while paying $30,000 in dividends each year.What is the equity income in Steinbart to be reported by Alex in 2011 A)$34,050. B)$38,020. C)$46,230. D)$51,450.

Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

النسخة 10الرقم المعياري الدولي: 978-1260575910

Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

النسخة 10الرقم المعياري الدولي: 978-1260575910

تمرين 46

Alex, Inc., buys 40 percent of Steinbart Company on January 1, 2010, for $530,000.The equity method of accounting is to be used.Steinbart's net assets on that date were $1.2 million.Any excess of cost over book value is attributable to a trade name with a 20-year remaining life.Steinbart immediately begins supplying inventory to Alex as follows:

Inventory held at the end of one year by Alex is sold at the beginning of the next.Steinbart reports net income of $80,000 in 2010 and $110,000 in 2011 while paying $30,000 in dividends each year.What is the equity income in Steinbart to be reported by Alex in 2011
A)$34,050.
B)$38,020.
C)$46,230.
D)$51,450.

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