Homework Help is Here – Start Your Trial Now!
Business
Accounting
On January 1, 2020, Stream Company acquired 20 percent of the outstanding voting shares of Q-Video, Inc., for $702,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $2.0 million and $746,000, respectively. A customer list compiled by Q-Video had an appraised value of $330,000, although it was not recorded on its books. The expected remaining life of the customer list was twenty years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill. Q-Video generated net income of $208,000 in 2020 and a net loss of $84,000 in 2021. In each of these two years, Q-Video declared and paid a cash dividend of $10,000 to its stockholders. During 2020, Q-Video sold inventory that had an original cost of $92,040 to Stream for $156,000. Of this balance, $78,000 was resold to outsiders during 2020, and the remainder was sold during 2021. In 2021, Q-Video sold inventory to Stream for $184,000. This inventory had cost only $138,000. Stream resold $98,000 of the inventory during 2021 and the rest during 2022. For 2020 and then for 2021, compute the amount that Stream should report as income from its investment in Q-Video in its external financial statements under the equity method. (Enter your answers in whole dollars and not in millions. Do not round intermediate calculations.) Answer is not complete. 2020 2021 Equity income Equity loss of $ 22,940x ✓ of

On January 1, 2020, Stream Company acquired 20 percent of the outstanding voting shares of Q-Video, Inc., for $702,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $2.0 million and $746,000, respectively. A customer list compiled by Q-Video had an appraised value of $330,000, although it was not recorded on its books. The expected remaining life of the customer list was twenty years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill. Q-Video generated net income of $208,000 in 2020 and a net loss of $84,000 in 2021. In each of these two years, Q-Video declared and paid a cash dividend of $10,000 to its stockholders. During 2020, Q-Video sold inventory that had an original cost of $92,040 to Stream for $156,000. Of this balance, $78,000 was resold to outsiders during 2020, and the remainder was sold during 2021. In 2021, Q-Video sold inventory to Stream for $184,000. This inventory had cost only $138,000. Stream resold $98,000 of the inventory during 2021 and the rest during 2022. For 2020 and then for 2021, compute the amount that Stream should report as income from its investment in Q-Video in its external financial statements under the equity method. (Enter your answers in whole dollars and not in millions. Do not round intermediate calculations.) Answer is not complete. 2020 2021 Equity income Equity loss of $ 22,940x ✓ of

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
None
On January 1, 2020, Stream Company acquired 20 percent of the outstanding voting shares of Q-Video, Inc., for $702,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $2.0 million and $746,000, respectively. A customer list compiled by Q-Video had an appraised value of $330,000, although it was not recorded on its books. The expected remaining life of the customer list was twenty years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill. Q-Video generated net income of $208,000 in 2020 and a net loss of $84,000 in 2021. In each of these two years, Q-Video declared and paid a cash dividend of $10,000 to its stockholders. During 2020, Q-Video sold inventory that had an original cost of $92,040 to Stream for $156,000. Of this balance, $78,000 was resold to outsiders during 2020, and the remainder was sold during 2021. In 2021, Q-Video sold inventory to Stream for $184,000. This inventory had cost only $138,000. Stream resold $98,000 of the inventory during 2021 and the rest during 2022. For 2020 and then for 2021, compute the amount that Stream should report as income from its investment in Q-Video in its external financial statements under the equity method. (Enter your answers in whole dollars and not in millions. Do not round intermediate calculations.) Answer is not complete. 2020 2021 Equity income Equity loss of $ 22,940x ✓ of
Transcribed Image Text:On January 1, 2020, Stream Company acquired 20 percent of the outstanding voting shares of Q-Video, Inc., for $702,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $2.0 million and $746,000, respectively. A customer list compiled by Q-Video had an appraised value of $330,000, although it was not recorded on its books. The expected remaining life of the customer list was twenty years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill. Q-Video generated net income of $208,000 in 2020 and a net loss of $84,000 in 2021. In each of these two years, Q-Video declared and paid a cash dividend of $10,000 to its stockholders. During 2020, Q-Video sold inventory that had an original cost of $92,040 to Stream for $156,000. Of this balance, $78,000 was resold to outsiders during 2020, and the remainder was sold during 2021. In 2021, Q-Video sold inventory to Stream for $184,000. This inventory had cost only $138,000. Stream resold $98,000 of the inventory during 2021 and the rest during 2022. For 2020 and then for 2021, compute the amount that Stream should report as income from its investment in Q-Video in its external financial statements under the equity method. (Enter your answers in whole dollars and not in millions. Do not round intermediate calculations.) Answer is not complete. 2020 2021 Equity income Equity loss of $ 22,940x ✓ of
Expert Solution
steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Accounting for Intangible assets
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS