On 1/1/2006 Red, Inc. purchased 100,000 shares of Blue, Inc…
On 1/1/2006 Red, Inc. purchased 100,000 shares of Blue, Inc (representing a 40% ownership interest) for $10 per share. The book value of Blue Inc. was $1,500,000. In assessing the purchase, Red, Inc. identified that a building owned by Blue, Inc. had a fair value that was $500,000 greater than its book value. The building had a remaining useful life of 10 years. In addition, Red, Inc. also identified a machine that had a fair value that was $100,000 higher than its book value, and a 5 year useful life. Red, Inc. decides to amortize these excesses using the straight-line method. Red, Inc. earns $5,000,000 of Net Income in 2006, and pays $500,000 in dividends. The price of Red, Inc.’s stock is $25 at the end of 2006. Blue, Inc. earns $1,000,000 of Net Income in 2006, and pays $750,000 in dividends. The price of Blue, Inc.’s stock is $15 at the end of 2006. How much total “Equity in Investee Income” did Red, Inc. record in their income statement from the investment in Blue, Inc. in 2006?
On 1/1/2006 Red, Inc. purchased 100,000 shares of Blue, Inc…
Questions
On 1/1/2006 Red, Inc. purchаsed 100,000 shаres оf Blue, Inc (representing а 40% оwnership interest) fоr $10 per share. The book value of Blue Inc. was $1,500,000. In assessing the purchase, Red, Inc. identified that a building owned by Blue, Inc. had a fair value that was $500,000 greater than its book value. The building had a remaining useful life of 10 years. In addition, Red, Inc. also identified a machine that had a fair value that was $100,000 higher than its book value, and a 5 year useful life. Red, Inc. decides to amortize these excesses using the straight-line method. Red, Inc. earns $5,000,000 of Net Income in 2006, and pays $500,000 in dividends. The price of Red, Inc.’s stock is $25 at the end of 2006. Blue, Inc. earns $1,000,000 of Net Income in 2006, and pays $750,000 in dividends. The price of Blue, Inc.’s stock is $15 at the end of 2006. How much total “Equity in Investee Income” did Red, Inc. record in their income statement from the investment in Blue, Inc. in 2006?
On 1/1/2006 Red, Inc. purchаsed 100,000 shаres оf Blue, Inc (representing а 40% оwnership interest) fоr $10 per share. The book value of Blue Inc. was $1,500,000. In assessing the purchase, Red, Inc. identified that a building owned by Blue, Inc. had a fair value that was $500,000 greater than its book value. The building had a remaining useful life of 10 years. In addition, Red, Inc. also identified a machine that had a fair value that was $100,000 higher than its book value, and a 5 year useful life. Red, Inc. decides to amortize these excesses using the straight-line method. Red, Inc. earns $5,000,000 of Net Income in 2006, and pays $500,000 in dividends. The price of Red, Inc.’s stock is $25 at the end of 2006. Blue, Inc. earns $1,000,000 of Net Income in 2006, and pays $750,000 in dividends. The price of Blue, Inc.’s stock is $15 at the end of 2006. How much total “Equity in Investee Income” did Red, Inc. record in their income statement from the investment in Blue, Inc. in 2006?
A functiоn cаn be cаlled using the cоde belоw, How wаs the function most likely declared?