Assume that, on January 1, 2021, Sycamore Corp. paid $2,040,000 for its investment in 36,000 shares of Starfish Inc. Further, assume that Starfish has 120,000 total shares of stock issued and estimates an eight-year remaining useful life and straight-line depreciation with no residual value for its depreciable assets. At January 1, 2021, the book value of Starfish's identifiable net assets was $7,060,000, and the fair value of Starfish was $10,0o00,000. The difference between Starfish's fair value and the book value of its identifiable net assets is attributable to $1,950,000 of land and the remainder to depreciable assets. Goodwill was not part of this transaction. The following information pertains to Starfish during 2021: $600,000 $360,000 Net Income Dividends declared and paid Market price of common stock on 12/31/2021 $ 80/share What amount would Sycamore Corp. report in its year-end 2021 balance sheet for its investment in Starfish Inc.? Multiple Choice $2,074,875. $2,220,000. $2,240,000.

Assume that, on January 1, 2021, Sycamore Corp. paid $2,040,000 for its investment in 36,000 shares of Starfish Inc. Further, assume that Starfish has 120,000 total shares of stock issued and estimates an eight-year remaining useful life and straight-line depreciation with no residual value for its depreciable assets. At January 1, 2021, the book value of Starfish's identifiable net assets was $7,060,000, and the fair value of Starfish was $10,0o00,000. The difference between Starfish's fair value and the book value of its identifiable net assets is attributable to $1,950,000 of land and the remainder to depreciable assets. Goodwill was not part of this transaction. The following information pertains to Starfish during 2021: $600,000 $360,000 Net Income Dividends declared and paid Market price of common stock on 12/31/2021 $ 80/share What amount would Sycamore Corp. report in its year-end 2021 balance sheet for its investment in Starfish Inc.? Multiple Choice $2,074,875. $2,220,000. $2,240,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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