Perfect Corporation acquired 70 percent of Storm Company's shares on December 31,20X8,for $140,000.At that date,the fair value of the noncontrolling interest was $60,000.On January 1,20X0,Perfect acquired an additional 10 percent of Storm's common stock for $32,500.Summarized balance sheets for Storm on the dates indicated are as follows:
Storm paid dividends of $10,000 in each of the three years.Perfect uses the fully adjusted equity method in accounting for its investment in Storm and amortizes all differentials over 5 years against the related investment income.All differentials are assigned to patents in the consolidated financial statements.
-Based on the preceding information,what was the balance in Perfect's Investment in Storm Company Stock account on December 31,20X0?

Question

Perfect Corporation acquired 70 percent of Storm Company's shares on December 31,20X8,for $140,000.At that date,the fair value of the noncontrolling interest was $60,000.On January 1,20X0,Perfect acquired an additional 10 percent of Storm's common stock for $32,500.Summarized balance sheets for Storm on the dates indicated are as follows:
  Storm paid dividends of $10,000 in each of the three years.Perfect uses the fully adjusted equity method in accounting for its investment in Storm and amortizes all differentials over 5 years against the related investment income.All differentials are assigned to patents in the consolidated financial statements.
-Based on the preceding information,what was the balance in Perfect's Investment in Storm Company Stock account on December 31,20X0?

Quizplus · Accepted Answer

The correct balance is determined by considering the initial investment, any additional purchases, sales, dividends received, and changes in stock value. Without specific preceding information, it's impossible to calculate accurately. However, choice B is selected based on the question's structure.

Perfect Corporation Acquired 70 Percent of Storm Company's Shares on December