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ACCT 411 Final Chapter 4&5 Verified Answers (2025)!!. $16.49
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  • March 7, 2025
  • 5
  • 2024/2025
  • Exam (elaborations)
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  • acct 411 final chapter 45 verified answers 2025

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Q&As
2025




ACCT 411 Final Chapter 4&5
Verified Answers (2025)!!




On January 1, Jennie Corporation purchased 30% of the common
stock of Katlee Company for $500,000. The following information
relates to Katlee at the date of acquisition.Cash$ 50,000Accounts
receivable (net)250,000Building
(net)700,000Land100,000Liabilities100,000Additional information
relating to the purchase appears below.Jennie has the ability to
exercise significant influence over Katlee and did not elect the fair
value option.Both the carrying amount and the fair value are the
same for receivables, land, and liabilities.The fair value of the
building is $900,000.Jennie depreciates its assets on a straight-
line basis. Both tangible and intangible assets are amortized over
10 years.For the current year, Katlee had net income of $400,000
and declared and paid dividends of $100,000.




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, Q&As
2025
The amount of equity method goodwill related to Jennie's
acquisition of Katlee at January 1 was - Answer ost of the
investment

$500,000

Equity in fair value of Katlee's net assets ($1,200,000 × 30%)

(360,000)

Equity method goodwill

$140,000



On January 2, Year 1, Kean Co. purchased a 30% interest in Pod
Co. for $250,000. On this date, Pod's equity was $500,000. The
carrying amounts of Pod's identifiable net assets approximated
their fair values, except for land whose fair value exceeded its
carrying amount by $200,000. Pod reported net income of
$100,000 for Year 1, and paid no dividends. Kean accounts for
this investment using the equity method. In its December 31,
Year 1, balance sheet, what amount should Kean report as
investment in Pod Co.? - Answer thus, Kean's share of Pod's
net income is $30,000 ($100,000 declared income × 30%), and
the investment account at year-end is $280,000 ($250,000
acquisition balance + $30,000 investment income).



Sage, Inc., bought 40% of Adams Corp.'s outstanding voting
common stock on January 2 for $400,000, which equaled a
proportionate share of the fair value of the net assets. The
carrying amount of the net assets at the purchase date was
$900,000. Fair values and carrying amounts were the same for all
items except for plant and inventory, for which fair values
exceeded their carrying amounts by $90,000 and $10,000,


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