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Business, 31.03.2020 03:26 heyItsLuna234

Puff Co. acquired 40% of Straw, Inc.'s voting common stock on January 2, Year 1, for $400,000. The carrying amount of Straw's net assets at the purchase date totaled $900,000. Fair 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. During Year 1, Straw reported net income of $150,000. What amount of income from this investment should Puff report in its Year 1 income statement if Puff uses the equity method to account for the investment?

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Puff Co. acquired 40% of Straw, Inc.'s voting common stock on January 2, Year 1, for $400,000. The c...
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