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On January 1, 2020, Grand Haven, Inc., reports net assets of $790,800 although equipment (with a four-year remaining life) having a book value of $452,000 is worth $520,000 and an unrecorded patent is valued at $54,900. Van Buren Corporation pays $730,960 on that date to acquire an 80 percent equity ownership in Grand Haven. If the patent has a remaining life of nine years, at what amount should the patent be reported on Van Buren's consolidated balance sheet at December 31, 2021

Sagot :

Answer:

The answer is "42700".

Explanation:  

1 January 2020 Patent of Fair Value  [tex]54900[/tex]

Less: 2020 and 2021 amortisation[tex]=54900\times \frac{2}{9} \ \ \ \ \ \ =12200[/tex]

December 31, 2021 Patent reported amount [tex]42700[/tex]

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