Dineshbhai Alex, Incorporated, buys 30 percent of Steinbart Company on January 1, 2023, for $1,098,000. The equity method of accounting is to be used. Steinbart'snet assets on that date were $3.30 million. Any excess of cost over book value is attributable to a trade name with a 20-year remaining life. Steinbartimmediately begins supplying inventory to Alex as follows:Amount Held byAlex at Year-End(at transferprice)$ 55,00055,000Inventory held at the end of one year by Alex is sold at the beginning of the next.Steinbart reports net income of $100,000 in 2023 and $130,900 in 2024 and declares $40,000 in dividends each year. What is the equity income inSteinbart to be reported by Alex in 2024?Year Cost to Steinbart Transfer Price20232024$ 156,200109,800$ 220,000180,000

Consolidation is an activity in which financial statements of a parent and its subsidiary are…

Alex, Incorporated, buys 30 percent of Steinbart Company on January 1, 2023, for $1,098,000. The equity method of accounting is to be used. Steinbart's net assets on that date were $3.30 million. Any excess of cost over book value is attributable to a trade name with a 20-year remaining life. Steinbart immediately begins supplying inventory to Alex as follows: Year 2023 2024 Cost to Steinbart Transfer Price $ 220,000 180,000 $ 156,200 109,800 Amount Held by Alex at Year-End (at transfer price) $ 55,000 55,000 Inventory held at the end of one year by Alex is sold at the beginning of the next. Steinbart reports net income of $100,000 in 2023 and $130,900 in 2024 and declares $40,000 in dividends each year. What is the equity income in Steinbart to be reported by Alex in 2024?

Alex, Incorporated, buys 30 percent of Steinbart Company on January 1, 2023, for $1,098,000. The equity method of accounting is to be used. Steinbart's net assets on that date were $3.30 million. Any excess of cost over book value is attributable to a trade name with a 20-year remaining life. Steinbart immediately begins supplying inventory to Alex as follows: Year 2023 2024 Cost to Steinbart Transfer Price $ 220,000 180,000 $ 156,200 109,800 Amount Held by Alex at Year-End (at transfer price) $ 55,000 55,000 Inventory held at the end of one year by Alex is sold at the beginning of the next. Steinbart reports net income of $100,000 in 2023 and $130,900 in 2024 and declares $40,000 in dividends each year. What is the equity income in Steinbart to be reported by Alex in 2024?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 18E

See similar textbooks

Similar questions

Acker Inc. bought 40% of Howell Co. on January 1, 2020 for $576,000. The equity method of accounting was used. The book value and fair value of the net assets of Howell on that date were $1,440,000. Acker began supplying inventory to Howell as follows: YEAR/ COST TO ACKER/ TRANSFER PRICE/ AMOUNT HELD BY HOWELL AT YEAR-END: 2020/ $55,000/ $75,000/ $15,000 2021/ $70,000/ $110,000/ $55,000 Howell reported net income of $100,000 in 2020 and $120,000 in 2021 while paying $40,000 in dividends each year. what is the equity in Howell income that should be reported by Acker in 2021? options are $32,000 - $41,600 - $48,000 - $49,600 - $50,600
Alex, Incorporated, buys 30 percent of Steinbart Company on January 1, 2023, for $599,000. The equity method of accounting is to be used. Steinbart’s net assets on that date were $1.65 million. Any excess of cost over book value is attributable to a trade name with a 20-year remaining life. Steinbart immediately begins supplying inventory to Alex as follows: Year Cost to Steinbart Transfer Price Amount Held by Alex at Year-End (at transfer price) 2023 $ 171,760 $ 226,000 $ 56,500 2024 118,320 174,000 53,000 The inventory held at the end of one year by Alex is sold at the beginning of the next. Steinbart reports net income of $104,500 in 2023 and $139,300 in 2024 and declares $20,000 in dividends each year. What is the equity income in Steinbart to be reported by Alex in 2024?
Alex, Inc., buys 30 percent of Steinbart Company on January 1, 2020, for $762,000. The equity method of accounting is to be used. Steinbart’s net assets on that date were $2.30 million. Any excess of cost over book value is attributable to a trade name with a 20-year remaining life. Steinbart immediately begins supplying inventory to Alex as follows: Year Cost to Steinbart Transfer Price Amount Held by Alexat Year-End(at transfer price) 2020 $202,160 $266,000 $66,500 2021 117,990 171,000 52,000 Inventory held at the end of one year by Alex is sold at the beginning of the next. Steinbart reports net income of $95,500 in 2020 and $130,300 in 2021 and declares $30,000 in dividends each year. What is the equity income in Steinbart to be reported by Alex in 2021?
Alex, Inc., buys 40 percent of Steinbart Company on January 1, 2020, for $530,000. 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 a trade name with a 20-year remaining life. Steinbart immediately begins supplying inventory to Alex as follows: Year Cost to Steinbart Transfer Price Amount Held by Alex at Year-End (at transfer price) 2020 70,000 100,00 25,000 2021 96,000 150,000 45,000 Inventory held at the end of one year by Alex is sold at the beginning of the next. Steinbart reports net income of $80,000 in 2020 and $110,000 in 2021 and declares $30,000 in dividends each year. What is the equity income in Steinbart to be reported by Alex in 2021? How do you get the answer and how do you get trade name price? a. $34,050 b. $38,020 c. $46,230 d. $51,450
Alex, Incorporated, buys 30 percent of Steinbart Company on January 1, 2023, for $1,098,000. The equity method of accounting is to be used. Steinbart's net assets on that date were $3.30 million. Any excess of cost over book value is attributable to a trade name with a 20-year remaining life. Steinbart immediately begins supplying inventory to Alex as follows: Amount Held by Alex at Year-End (at transfer price) $ 55,000 55,000 Inventory held at the end of one year by Alex is sold at the beginning of the next. Steinbart reports net income of $100,000 in 2023 and $130,900 in 2024 and declares $40,000 in dividends each year. What is the equity income in Steinbart to be reported by Alex in 2024? Year Cost to Steinbart Transfer Price 2023 2024 $ 156,200 109,800 $ 220,000 180,000
Acker Inc. bought 40% of Howell Co. on January 1, 2020 for $576,000. The equity method of accounting was used. The book value and fair value of the net assets of Howell on that date were $1,440,000. Acker began supplying inventory to Howell as follows: Year Cost to Acker Transfer Price Amount Held by Howell at Year-End 2020 $ 55,000 $ 75,000 $15,000 2021 $ 70,000 $ 110,000 $55,000 Howell reported net income of $100,000 in 2020 and $120,000 in 2021 while paying $40,000 in dividends each year. What is the Equity in Howell Income that should be reported by Acker in 2020? Multiple Choice $10,000. $24,000. $36,000. $38,400. $40,000.
15. Northridge, Inc., buys 40% of Matador Company on January 1, 2019. for $550,000. The equity method of accounting is to be used, Matador's net assets on that date were $1.2 million. Any excess of cost over book value is attributable to a trade name with a 20-year remaining life. Matador immediately begins supplying inventory to Northridge as follows: Amount Held by Northridge Year Cost to Matador Transfer Price At Year End (at transfer price)2019 $70,000 $100,000 $25,0002020 $96,000 $150,000 $45,000Inventory held at the end of one year by Northridge is sold at the beginning of the next. Matador reports net income of $100,000 in 2019 and $150.000 in 2020 and declares (and pays)…
Cayman Inc. bought 25% of Maya Company on January 1, 2022 for $800,000. The equity method of accounting was used. The book value and fair value of the net assets of Maya on that date were $2,100,000. Maya began supplying inventory to Cayman as follows: Year Cost to Maya Transfer Price Amount Held by Cayman at Year-End 2022$ 30,000 $ 45,000 $ 8,400 2023$ 48,000 $ 80,000 $ 20,000 Maya reported net income of $100,000 in 2022 and $120,000 in 2023 while paying $40,000 in dividends each year. What is equity in Maya income that should be recognized by Cayman in 2023? O $25,000 Ob $28,700 O $2,000 Od $31,300 e$30,000
Camille, Inc., sold $147,000 in inventory to Eckerle Company during 2020 for $245,000. Eckerle resold $109,000 of this merchandise in 2020 with the remainder to be disposed of during 2021. Assuming that Camille owns 34 percent of Eckerle and applies the equity method, what journal entry is recorded at the end of 2020 to defer the intra-entity gross profit?
Alex, Inc., buys 40 percent of Steinbart Company on January 1, 2017, for $530,000. 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 a trade name with a 20-year remaining life. Steinbart immediately begins supplying inventory to Alex as follows:Inventory held at the end of one year by Alex is sold at the beginning of the next.Steinbart reports net income of $80,000 in 2017 and $110,000 in 2018 and declares $30,000 in dividends each year. What is the equity income in Steinbart to be reported by Alex in 2018?a. $34,050b. $38,020c. $46,230d. $51,450
Camille, Incorporated, sold $147,000 in inventory to Eckerle Company during 2023 for $245,000. Eckerle resold $109,000 of this merchandise in 2023 with the remainder to be disposed of during 2024. Required: Assuming that Camille owns 34 percent of Eckerle and applies the equity method, what journal entry is recorded at the end of 2023 to defer the intra-entity gross profit? Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. 1.Record the entry at the end of 2023 to defer unrealized gross profit.
Camille, Inc., sold $130,000 in inventory to Eckerle Company during 2020 for $250,000. Eckerle resold $89,000 of this merchandise in 2020 with the remainder to be disposed of during 2021. Assuming that Camille owns 20 percent of Eckerle and applies the equity method, what journal entry is recorded at the end of 2020 to defer the intra-entity gross profit? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)