cricket 5:56 PM Files Final Practice Exam.docx D. $33,750 29 25% of the outstand
ID: 2595916 • Letter: C
Question
cricket 5:56 PM Files Final Practice Exam.docx D. $33,750 29 25% of the outstanding voting common stock of Gold Company for $250,000. The book value of the acquired shares was $200,000. The excess of cost over book value is attributable to an intangible asset on Gold's books that was undervalued and had a remaining useful life of five years For the year ended December 31, 2016, Gold reported net income of $100,000 and paid cash dividends of $20,000 What is the carrving value of Green's investment in Gold at December 31, 2016? On January 1, 2016, Green Corporation purchased A. $277,500 B. $250,000 c. $270,000 D. $267,500 30.Wriglee, Inc. went to court this year and successfully defended its patent from infringement by a competitor. The cost of this defense should be charged to patents and amortized over the legal life of the patent. B.legal fees and amortized over 5 years or less C.expenses of the period patents and amortized over the remaining useful life of the patent 31. On January 2, 2015, Howdy Doody Corporation purchased 12% of Ranger Corporation's common stock for $50,000 and classified the investment as available for sale anger's net income for the years ended December 31 . Courses Calendar To Do Notifications MessagesExplanation / Answer
Ans 29: c) $ 270000
Solu: Book Value of Investment = 250000 + 25% of(100000-20000)
= $ 270000
Ans 30: Option A
Solu: As per GAAP , any cost incurrred to save the patent and increase its economic life will be capitalised and amortised over its economical life.
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