Excess cost amortization


Problem:

BuyCo holds 25 percent of the outstanding shares of Marqueen and appropriately applies the equity method of accounting. Excess cost amortization (related to a patent) associated with this investment amounts to $10,000 per year. For 2009, Marqueen reported earnings of $100,000 and pays cash dividends of $30,000. During that year, Marqueen acquired inventory for $50,000, which it then sold to BuyCo for $80,000. At the end of 2009, BuyCo continued to hold merchandise with a transfer price of $32,000.

Solution Preview :

Prepared by a verified Expert
Cost Accounting: Excess cost amortization
Reference No:- TGS02028441

Now Priced at $10 (50% Discount)

Recommended (99%)

Rated (4.3/5)