On January 1,2011,Pailor Inc.purchased 40% of the outstanding stock of Saska Company for $300,000.At that time,Saska's stockholders' equity consisted of $270,000 common stock and $330,000 of retained earnings.Saska Corporation reported net income of $360,000 for 2011.The allocation of the $60,000 excess of cost over book value acquired is shown below,along with information relating to the useful lives of the items:
Required:
Determine Pailor's investment income from Saska for 2011.

Question

On January 1,2011,Pailor Inc.purchased 40% of the outstanding stock of Saska Company for $300,000.At that time,Saska's stockholders' equity consisted of $270,000 common stock and $330,000 of retained earnings.Saska Corporation reported net income of $360,000 for 2011.The allocation of the $60,000 excess of cost over book value acquired is shown below,along with information relating to the useful lives of the items:
  Required:
Determine Pailor's investment income from Saska for 2011.

Quizplus · Accepted Answer

The Answer of On January 1,2011,Pailor Inc.purchased 40% of the outstanding stock of Saska Company for $300,000.At that time,Saska's stockholders' equity consisted of $270,000 common stock and $330,000 of retained earnings.Saska Corporation reported net income of $360,000 for 2011.The allocation of the $60,000 excess of cost over book value acquired is shown below,along with information relating to the useful lives of the items:
  Required:
Determine Pailor's investment income from Saska for 2011.