Renfroe, Inc. acquires 10% of Stanley Corporation on January 1, 2012, for $90,00
ID: 2426111 • Letter: R
Question
Renfroe, Inc. acquires 10% of Stanley Corporation on January 1, 2012, for $90,000 when the book value of Stanley was $1,000,000. During 2012, Stanley reported net income of $215,000 and paid dividends of $50,000. On January 1, 2013, Renfroe purchased an additional 30% of Stanley for $325,000. Any excess of cost over book value is attributable to goodwill with an indefinite life. During 2013, Stanley reported net income of $320,000 and paid dividends of $50,000.
What is the balance in the Investment in Stanley Corporation on December 31, 2013?
Question 10 options:
$415,000.
$512,500.
$523,000.
$539,500.
$544,500.
$415,000.
$512,500.
$523,000.
$539,500.
$544,500.
Explanation / Answer
Renfroe, Inc. acquires 10% of Stanley Corporation on January 1, 2012, for $90,000 when the book value of Stanley was $1,000,000. During 2012, Stanley reported net income of $215,000 and paid dividends of $50,000. On January 1, 2013, Renfroe purchased an additional 30% of Stanley for $325,000. Any excess of cost over book value is attributable to goodwill with an indefinite life. During 2013, Stanley reported net income of $320,000 and paid dividends of $50,000
correct ans;
a) $415,000