Assume that,on January 1,2016,Sosa Enterprises paid $3,000,000 for its investment in 36,000 shares of Orioles Co.Further,assume that Orioles has 120,000 total shares of stock issued and estimates an eight-year remaining useful life and straight-line depreciation with no residual value for its depreciable assets.
At January 1,2016,the book value of Orioles' identifiable net assets was $7,000,000,and the fair value of Orioles was $10,000,000.The difference between Orioles' fair value and the book value of its identifiable net assets is attributable to $1,800,000 of land and the remainder to depreciable assets.Goodwill was not part of this transaction.
The following information pertains to Orioles during 2016:

What amount would Sosa Enterprises report in its year-end 2016 balance sheet for its investment in Orioles Co.?

Question

Assume that,on January 1,2016,Sosa Enterprises paid $3,000,000 for its investment in 36,000 shares of Orioles Co.Further,assume that Orioles has 120,000 total shares of stock issued and estimates an eight-year remaining useful life and straight-line depreciation with no residual value for its depreciable assets.
At January 1,2016,the book value of Orioles' identifiable net assets was $7,000,000,and the fair value of Orioles was $10,000,000.The difference between Orioles' fair value and the book value of its identifiable net assets is attributable to $1,800,000 of land and the remainder to depreciable assets.Goodwill was not part of this transaction.
The following information pertains to Orioles during 2016:

What amount would Sosa Enterprises report in its year-end 2016 balance sheet for its investment in Orioles Co.?

Quizplus · Accepted Answer

The Answer of Assume that,on January 1,2016,Sosa Enterprises paid $3,000,000 for its investment in 36,000 shares of Orioles Co.Further,assume that Orioles has 120,000 total shares of stock issued and estimates an eight-year remaining useful life and straight-line depreciation with no residual value for its depreciable assets.
At January 1,2016,the book value of Orioles' identifiable net assets was $7,000,000,and the fair value of Orioles was $10,000,000.The difference between Orioles' fair value and the book value of its identifiable net assets is attributable to $1,800,000 of land and the remainder to depreciable assets.Goodwill was not part of this transaction.
The following information pertains to Orioles during 2016:

What amount would Sosa Enterprises report in its year-end 2016 balance sheet for its investment in Orioles Co.?

Assume That,on January 1,2016,Sosa Enterprises Paid $3,000,000 for Its Investment