EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
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7.3
Feather Ltd. invested $1 million in Goose Corp. early in the current year, receiving 25% of its outstanding shares. At the time of the purchase, Goose Corp. had a carrying amount of $3.2 million. Goose Corp. pays out 35% of its net income in dividends each year. Assume that Feather Ltd. applies IFRS and that the 25% holding of Goose shares is enough to enable Feather to significantly influence the operating, investing, and financing decisions of Goose.
Required
Use the information in the following T account for the investment in Goose to answer the following questions
|
Investment in Goose Corp |
|
|
$1,000,000 |
|
|
110,000 |
|
|
$38,500 |
|
|
14,000 |
- How much was Feather Ltd.'s share of Goose Corp.'s net income for the year?
- How much was Feather Ltd.'s share of Goose Corp.'s dividends for the year?
- How much was Feather Ltd.'s annual depreciation of the excess payment for capital assets?
- What was Goose Corp.'s total net income for the year?
- What were Goose Corp.'s total dividends for the year?
- Assuming that
depreciable assets had a remaining useful life of 10 years when Feather acquired its investment in Goose, how much of the payment in excess of carrying amount was assigned togoodwill ?
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