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 to goodwill?
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 to goodwill?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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 to goodwill?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education