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Balance in Investment Account

What is the balance in Heinreich's investment account at December 31, 2002?
Salem Co. had the following account balances as of February 1, 2002:

See attached file for full problem description.

On January 2, 2002, Heinreich Co. paid $500,000 for 25% of the voting common stock of Jones Corp. At the time of the investment, Jones had net assets with a book value and fair market value of $1,800,000. During 2002, Jones incurred a net loss of $60,000 and paid dividends of $100,000.

Required:

What is the balance in Heinreich's investment account at December 31, 2002?

2.Salem Co. had the following account balances as of February 1, 2002:

Bellington Inc. paid $1.7 million in cash and issued 12,000 shares of its $30 par value common stock (valued at $90 per share) for all of Salem's outstanding common stock.

Required:

Determine the balance for Goodwill that would be included in a February 1, 2002, consolidation.

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1.On January 2, 2002, Heinreich Co. paid $500,000 for 25% of the voting common stock of Jones Corp. At the time of the investment, Jones had net assets with a book value and fair market value of $1,800,000. During 2002, Jones incurred a net loss of $60,000 and paid dividends of $100,000.

Required:

What is the balance in Heinreich's investment account at December ...

Solution Summary

The solution explains the calculation of the balance in investment account and the amount of goodwill

$2.19