On January 1, 2023, Stream Company acquired 25 percent of the outstanding voting shares of Q-Video, Incorporated, for $718,000. Q- Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $1.8 million and $669,000, respectively. A customer list compiled by Q-Video had an appraised value of $234,000, although it was not recorded on its books. The expected remaining life of the customer list was five 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 $222,000 in 2023 and a net loss of $147,000 in 2024. In each of these two years, Q-Video declared and paid a cash dividend of $16,000 to its stockholders. During 2023, Q-Video sold Inventory that had an original cost of $111,000 to Stream for $150,000. Of this balance, $75,000 was resold to outsiders during 2023, and the remainder was sold during 2024. In 2024, Q-Video sold Inventory to Stream for $175,000. This Inventory had cost only $140,000. Stream resold $98,000 of the Inventory during 2024 and the rest during 2025. Required: For 2023 and then for 2024, compute the amount that Stream should report as income from its Investment in Q-Video in its external financial statements under the equity method. Note: Enter your answers in whole dollars and not in millions. 2023 2024 of of
On January 1, 2023, Stream Company acquired 25 percent of the outstanding voting shares of Q-Video, Incorporated, for $718,000. Q- Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $1.8 million and $669,000, respectively. A customer list compiled by Q-Video had an appraised value of $234,000, although it was not recorded on its books. The expected remaining life of the customer list was five 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 $222,000 in 2023 and a net loss of $147,000 in 2024. In each of these two years, Q-Video declared and paid a cash dividend of $16,000 to its stockholders. During 2023, Q-Video sold Inventory that had an original cost of $111,000 to Stream for $150,000. Of this balance, $75,000 was resold to outsiders during 2023, and the remainder was sold during 2024. In 2024, Q-Video sold Inventory to Stream for $175,000. This Inventory had cost only $140,000. Stream resold $98,000 of the Inventory during 2024 and the rest during 2025. Required: For 2023 and then for 2024, compute the amount that Stream should report as income from its Investment in Q-Video in its external financial statements under the equity method. Note: Enter your answers in whole dollars and not in millions. 2023 2024 of of
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2023, Stream Company acquired 25 percent of the outstanding voting shares of Q-Video, Incorporated, for $718,000. Q-
Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of
$1.8 million and $669,000, respectively. A customer list compiled by Q-Video had an appraised value of $234,000, although it was not
recorded on its books. The expected remaining life of the customer list was five 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 $222,000 in 2023 and a net loss of $147,000 in 2024. In each of these two years, Q-Video declared
and paid a cash dividend of $16,000 to its stockholders.
During 2023, Q-Video sold Inventory that had an original cost of $111,000 to Stream for $150,000. Of this balance, $75,000 was resold
to outsiders during 2023, and the remainder was sold during 2024. In 2024, Q-Video sold Inventory to Stream for $175,000. This
Inventory had cost only $140,000. Stream resold $98,000 of the Inventory during 2024 and the rest during 2025.
Required:
For 2023 and then for 2024, compute the amount that Stream should report as income from its Investment in Q-Video In its external
financial statements under the equity method.
Note: Enter your answers in whole dollars and not in millions.
2023
2024
of
of
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