Help Sta 3 Required information SB Atlarge Inc. owns 30% of the outstanding Atar
ID: 2554004 • Letter: H
Question
Help Sta 3 Required information SB Atlarge Inc. owns 30% of the outstanding Atarge Inc. owns 30% of the outstanding voting common stock of Ticker Co. and has the ability to significantly influence the investee's operations and decision-making. On January 1, 2018, the balance in the Investment in Ticker Co. account was $402,000. Amortization associated with the purchase of this investment is $8,000 per year. During 2018. Ticker earned income of $108,000 and paid cash dividends of $36,000. Previously in 2017, Ticker had sold inventory costing $28,800 to Atlarge for $48,000. All but 25% of this merchandise was consumed by Atarge during 2017. The remainder was used during the first few weeks of 2018. Additional sales were made to Atlarge in 2018, inventory costing $33,600 was transferred at a price of $60,000. Of this total, 40% was not consumed until 2019. MC Qu. 16 What was the balance in the... What was the balance in the Investment in Ticker Co. account at the end of 2018? Multiple Choice $401136 $413,872.Explanation / Answer
2013 Beginning Balance = $402,000
2013 Income Recognized:
2013 Income $108,000 × 30% = $32,400 2012
Inventory Profit Realized $48,000 - $28,800 = $19,200 × 25% = $4,800 × 30% = $1,440
2013 Inventory Profit Deferred =$60,000 - $33,600 = $26,400 × 40% = $10,560 × 30% = $3,168
2013 Purchase Amortization $8,000 $32,400 + $1,440 - $3,168 - $8,000 = $22,672
2013 Dividend Received = ($36,000 × 30%) = $10,800
2013 Ending Balance = ($402,000 + $22,672 - $10,800) = $413,872
It is option B
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