Problem 1-12 (LO 1-3, 1-4, 1-6) Alex, Inc., buys 30 percent of Steinbart Company on...
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Problem 1-12 (LO 1-3, 1-4, 1-6) Alex, Inc., buys 30 percent of Steinbart Company on January 1, 2017, for $1,128,000. The equity method of accounting is to be used. Steinbart's net assets on that date were $3.60 million. Any excess of cost over book value is attributable to a trade name with a 20-year remaining life. Steinbart immediately begins supplying inventory to Alex as follows: Year 2017 2018 Cost to Steinbart $160,800 112,860 Transfer Price $240,000 188, 100 Amount Held by Alex at Year-End (at Transfer Price) $60,000 57,700 Inventory held at the end of one year by Alex is sold at the beginning of the next. Steinbart reports net income of $80,000 in 2017 and $115,600 in 2018 and declares $30,000 in dividends each year. What is the equity income in Steinbart to be reported by Alex in 2018
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