On January 1, 2017, Grand Haven, Inc., reports net assets of $945,300 although equipment (with a four-year remaining life) having a book value of $510,000 is worth $591,500 and an unrecorded patent is valued at $45,000. Van Buren Corporation pays $857,440 on that date to acquire an 80 percent equity ownership in Grand Haven. If the patent has a remaining life of nine years, at what amount should the patent be reported on Van Buren's consolidated balance sheet at December 31, 2018?

Question

Avery Brooks

Business

12 December, 04:03

On January 1, 2017, Grand Haven, Inc., reports net assets of $945,300 although equipment (with a four-year remaining life) having a book value of $510,000 is worth $591,500 and an unrecorded patent is valued at $45,000. Van Buren Corporation pays $857,440 on that date to acquire an 80 percent equity ownership in Grand Haven. If the patent has a remaining life of nine years, at what amount should the patent be reported on Van Buren's consolidated balance sheet at December 31, 2018?

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Answers (1)

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Conner Oconnell · Answer 1

patent on the consolidated estament: 32,000

Explanation:

45,000 x 80% = 36,000

36,000 / 9 = 4,000 amortization per year

patent of Grand heaven

debit credit

36,000 recognize at purchase

4,000 december 31th amortization

32,000 balance.