Excrcise 22-22 https:\'edugen.wileyplus.com edugen/shared\'assignmenttest qprint

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Excrcise 22-22 https:'edugen.wileyplus.com edugen/shared'assignmenttest qprint.uni Exercise 22-22 On January 1, 2017, Windsor Co. purchased 23,000 shares (a 10% interest) in Elton John Corp. for $1,510,000. At the time, the book value and the fair value of John's net assets were $12,900,000 On July 1, 2018, Windsor paid $2,760,000 for 46,000 additional shares of John common stock, which represented a 20% investment in John. The fair value of John's identifiable assets net of liabilities was equal to their carrying amount of $14,000,000. As a result of this transaction, Windsor owns 30% of John and can exercise significant influence over John's operating and financial policies. (Any excess fair value is attributed to goodwill.) John reported the following net income and declared and paid the following dividends Net Income $680,000 520,000 888,000 Dividend per Share Year ended 12/31/17 Six months ended 6/30/18 Six months ended 12/31/18 None None $1.50 Determine the ending balance that Windsor Co. should report as its investment in John Corp. at the end of 2018 Investment in Elton John Corp. , Question Attempts: 0 of 3 used Copyright?2000-2018 by John Wiley & Sons, Inc. ar related companies. All rights reserved. of 1 3/25/2018, 11:55 AM

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Answer

Investment in John Corp. $1510000 Net income is $680000 and share of Whispering co.10% and no dividend     $68000 Net income is $520000 and share of Whispering co.10% and no dividend on 6/30/18 $52000 Total value $1630000 Investment in John Corp additional shares investment $2760000 The net income which received 30%*888000 $266400 Dividend rceived 1.50*(23000+46000) ($103500) Total value $2922900 Total carrying amount of investment $4552900

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