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Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik
Edition 10ISBN: 978-1260575910Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik
Edition 10ISBN: 978-1260575910 Exercise 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.
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 2011A)$34,050.
B)$38,020.
C)$46,230.
D)$51,450.
Explanation
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Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik
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