values equaled carrying amounts for all items except
equipment, for which fair values exceeded carrying amounts
by $100,000. The equipment has a five year life. Goodwill, if
any, is expected to have a useful life of 10 years. During 2005,
Straw reported net income of $150,000. What amount of
income from this investment should Puff report in its 2005
income statement?
Question 14
The discount resulting from the determination of a note
payable's present value should be reported on the balance
sheet as a(an)
Question 15
Land was purchased to be used as the site for the construction
of a plant. A building on the property was sold and removed by
the buyer so that construction on the plant could begin. The
proceeds from the sale of the building should be
Question 16
Park Co. uses the equity method to account for its January 1,
2004, purchase of Tun Inc.'s common stock. On January 1,
2004, the fair values of Tun's FIFO inventory and land
exceeded their carrying amounts. How do these excesses of fair
values over carrying amounts affect Park's reported equity in
Tun's 2004 earnings?
Question 17