casei oe scentnotinets y scam sitalteiercnemet ESS el ic rc Sec irene ant ca i ey Response palsies rears Un tegen Seed eS seer fe tines ame Dividend recive ‘ves Question | Answer ‘Share inet income (20% 18,000) 3000 ‘Amortization of exes of cost (200,000) (2o0n% Investment come fr euies year Acauison cost 000.00 Crying amount finest aquired (5000.00) Exceis of cost ovr carving amount ‘The exes ofcos overt caring amount hud “Scuola ctedeprane ‘Scr choad be amorond oer the remaining ssf Leo depreciable asset. eval Sich amoriatoni eae big investment o_o" come and Question 2 Answerd Invert isa “om Seine alent xaos fa) Caying oan Fiovesinet insane _sosnoss a4 ‘problem37.2 (AICPA Adapted) “atthe Binning ofeurestyea, Wel Co ue iain Well Company purctased1O%oF ‘Rea Company's oustanding ovis shares for 00 00. ‘Well Companys the larpest single sarbolerin Rea and Wells officers area majority oRe'sboud of directors. “The Investee reported net income of S000 forthe cute sear and pai ath dvdend of 1,500,000 ‘Wht sou shuldbeepoted asinvesiestin Rea Company st yearend? a. 4,500,000 ‘350,000 4000000 ‘4 3,850,000 Solution 37-2 Answer ‘PAS 28, paragraph provides taf the investor ols reso Fairey hugh stirs, less than 20% ofthe voting Powe: ‘tthe investe, its presumed tha the investor doesnot BOVE Sfoiicent influence, valess such infuence ean be elesely demonstrated sReu'sagssingle shareholder andthe presse Wes poston Meera a maori of Re’ bose of dicta oes ta Wel des bve signif iauence dete To%ownestip -Acordingy,the enya ewe Acquistion Jun | 4.920010 Se inom on 500.0) Sou Toa “1000 Ba in ea vided 106315000 isan) ve Decenber31 000 Carrying amount of inet as