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by paying an amount
equal to equal to Secret’s net assets. All the assets and liabilities of Secret had carrying values equal to their FV at that
time.
For the year 2023 and 2024, both Peachy and Secret had intercompany sales of assets with each other.
Information resulting from intercompany sales of assets are summarize below:
Date of sale Seller Selling price Original Cost Acc. Dep. Book Value Remaining Life
1/1/2023 Secret 150,000 720,000 432,000 288,000 8 years
3/31/2023 Peachy 900,000 1,200,000 450,000 750,000 5 years
5/1/2024 Secret 3,000,000 2,500,000 - 2,500,000 -
9/30/2024 Secret 1,250,000 4,000,000 3,000,000 1,000,000 10 years
Net income and dividends paid 2023 and 2024 are as follows:
Peachy Co. Secret Corp.
Net Income Div. Paid Net Income Div. Paid
2023 1,968,000 720,000 600,000 360,000
2024 2,342,000 800,000 500,000 300,000