Sandpiper Inc.acquired a 30% interest in Shore Corporation for $27,000 cash on January 1,2011,when Shore's stockholders' equity consisted of $30,000 of capital stock and $20,000 of retained earnings.Shore Corporation reported net income of $18,000 for 2011.The allocation of the $12,000 excess of cost over book value acquired on January 1 is shown below,along with information relating to the useful lives of the items:
Required:
Determine Sandpiper's investment income from Shore for 2011.

Question

Sandpiper Inc.acquired a 30% interest in Shore Corporation for $27,000 cash on January 1,2011,when Shore's stockholders' equity consisted of $30,000 of capital stock and $20,000 of retained earnings.Shore Corporation reported net income of $18,000 for 2011.The allocation of the $12,000 excess of cost over book value acquired on January 1 is shown below,along with information relating to the useful lives of the items:
  Required:
Determine Sandpiper's investment income from Shore for 2011.

Quizplus · Accepted Answer

The Answer of Sandpiper Inc.acquired a 30% interest in Shore Corporation for $27,000 cash on January 1,2011,when Shore's stockholders' equity consisted of $30,000 of capital stock and $20,000 of retained earnings.Shore Corporation reported net income of $18,000 for 2011.The allocation of the $12,000 excess of cost over book value acquired on January 1 is shown below,along with information relating to the useful lives of the items:
  Required:
Determine Sandpiper's investment income from Shore for 2011.