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    Balance in Investment Account

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    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

    $2.49

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