Puddle Incorporated purchased an 80% interest in Soake Company, located in England.Puddle paid $1,560,000 on January 1, 2011, at a time when the book values of Soake equaled the fair values.Any excess cost/book value differential was attributed to a patent with a five-year remaining useful life.Soake's books are kept in the functional currency, pounds.A summary of Soake's equity is shown below for the first year that Puddle had ownership interest.
Required:
Determine Puddle's income from Soake for 2011, and the balance of Puddle's Investment in Soake account at December 31, 2011.

Question

Puddle Incorporated purchased an 80% interest in Soake Company, located in England.Puddle paid $1,560,000 on January 1, 2011, at a time when the book values of Soake equaled the fair values.Any excess cost/book value differential was attributed to a patent with a five-year remaining useful life.Soake's books are kept in the functional currency, pounds.A summary of Soake's equity is shown below for the first year that Puddle had ownership interest.
  Required:
Determine Puddle's income from Soake for 2011, and the balance of Puddle's Investment in Soake account at December 31, 2011.

Quizplus · Accepted Answer

The Answer of Puddle Incorporated purchased an 80% interest in Soake Company, located in England.Puddle paid $1,560,000 on January 1, 2011, at a time when the book values of Soake equaled the fair values.Any excess cost/book value differential was attributed to a patent with a five-year remaining useful life.Soake's books are kept in the functional currency, pounds.A summary of Soake's equity is shown below for the first year that Puddle had ownership interest.
  Required:
Determine Puddle's income from Soake for 2011, and the balance of Puddle's Investment in Soake account at December 31, 2011.

Puddle Incorporated Purchased an 80% Interest in Soake Company, Located