Parkovash, Incorporated, obtained percent of Salemo Companys common stock on January by issuing shares of
$ par value common stock. Parkovash's shares had a $ per share fair value. On that date, Salerno reported a net book value of
$ However, its equipment with a year remaining life was undervalued by $ in the company's accounting records.
Also, Salemo had developed computer software with an assessed value of $ although no value had been recorded on
Salerno's books. The computer software had an estimated remaining useful life of years.
The following balances come from the individual accounting records of these two companies as of December :
The following balances come from the individual accounting records of these two companies as of December :
Required:
a What balance does Parkovash's Investment in Salerno account show on December when the equity method is
applied?
b What is the consolidated net income for the year ending December
c What is the consolidated equipment balance as of December
e Would this answer be affected by the investment method applied by the parent?
d Prepare entry C for the beginning of the Retained Eamings account on a December by using initial value, partial equity
and equity method.
Answer is complete but not entirely corred.
Complete this question by entering your answers in the tabs below.
a What balance does Parkovash's Investment in Salerno account show on December when the equity method is
applied?
b What is the consolidated net income for the year ending December
c What is the consolidated equipment balance as of December
Would this answer be affected by the investment method applied by the parent?
