ACC 306 WEEK 1 DQ 1 EQUITY METHOD ASH COURSE

ACC 306 WEEK 1 DQ 1 EQUITY METHOD ASH COURSE
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ACC 306 WEEK 1 DQ 1 EQUITY METHOD ASH COURSE
P 12–13 – Miller Properties – Equity method ? LO5 LO6
On January 2, 2011, Miller Properties paid $19 million for 1 million shares of Marlon Company’s 6 million outstanding common shares. Miller’s CEO became a member of Marlon’s board of directors during the first quarter of 2011.
The carrying amount of Marlon’s net assets was $66 million. Miller estimated the fair value of those net as- sets to be the same except for a patent valued at $24 million above cost. The remaining amortization period for the patent is 10 years.
Marlon reported earnings of $12 million and paid dividends of $6 million during 2011. On December 31, 2011, Marlon’s common stock was trading on the NYSE at $18.50 per share.
Required:
1. When considering whether to account for its investment in Marlon under the equity method, what criteria should Miller’s management apply2. Assume Miller accounts for its investment in Marlon using the equity method. Ignoring income taxes, deter- mine the amounts related to the investment to be reported in its 2011:
a. Income statement.ACC 306 WEEK 1 DQ 1 EQUITY METHOD ASH COURSEb. Balance sheet.
c. Statement of cash flows.
Home Work Hour aims to provide quality study notes and tutorials to the students of ACC 306 Week 1 DQ 1 Equity Method Ash Course in order to ace their studies.ACC 306 WEEK 1 DQ 1 EQUITY METHOD ASH COURSE
To purchase this visit here:
http://www.nerdypupil.com/product/acc-306-week-1-dq-1-equity-method-ash-course/
Contact us at:
[email protected]
ACC 306 WEEK 1 DQ 1 EQUITY METHOD ASH COURSE
P 12–13 – Miller Properties – Equity method ? LO5 LO6
On January 2, 2011, Miller Properties paid $19 million for 1 million shares of Marlon Company’s 6 million outstanding common shares….