On April 1, 2018, BigBen Company acquired 30% of the shares of LittleTick, Inc. BigBen paid $100,000 for the investment, which is $40,000 more than 30% of the book value of LittleTick's identifiable net assets. BigBen attributed $15,000 of the $40,000 difference to inventory that will be sold in the remainder of 2018, and the rest to goodwill. LittleTick recognized a total of $20,000 of net income for 2018, and paid total dividends for the year $10,000; these dividends were issued quarterly. BigBen's investment in LittleTick will affect BigBen's 2018 net income by:

Question

Quizplus · Accepted Answer

(30%)(¾ of the year)($20,000) - $15,000 = ($10,500).

On April 1, 2018, BigBen Company Acquired 30% of the Shares