Purchase Solution

Equity income in Steinbart to be reported by Alex

Not what you're looking for?

Ask Custom Question

Alex, Inc, buys 40 percent of Steinbart Company on January 1, 2008 for $530000. The equity method of accounting is to be used. Steinbarts net assets on that date were $1.2 million. Any excess of cost over book value is attributable to trade name with a 20-year remaining life. Steinbart immediatlely begins suppling inventory to Alex as follows: Year Cost to Steinbart Transfer price Amount Held by Alex at Year-end (At transfer price)
2008 $70,000 $100,000 $25,000
2009 $96,000 $150,000 $45,000
Inventory held at the end of year by Alex is sold at the beginning of the next. Steinbart reports net income of $80000 in 2008 and $110000 in 2009 while paying $30000 in dividends each year. What is the equity income in Steinbart to be reported by Alex in 2009?

Purchase this Solution

Solution Summary

The expert examines equity income in Steinbart to be reported by Alex.

Solution Preview

Alex, Inc, buys 40 percent of Steinbart Company on January 1, 2008 for $530000. The equity method of accounting is to be used. Steinbart's net assets on that date were $1.2 million. Any excess of cost over book value is attributable to trade name with a 20-year remaining life. Steinbart immediately begins supplying inventory to Alex as follows: Year ...

Solution provided by:
Education
  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
Recent Feedback
  • "ty i have more need help with"
  • "ty i have jmore i need help with"
  • "great help"
  • "excellent help"
  • "Very helpful and easy to understand."
Purchase this Solution


Free BrainMass Quizzes
Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Basics of corporate finance

These questions will test you on your knowledge of finance.