Question

Required Information On January 1, 2022, Palmcroft Company acquired 100 percent of the outstanding voting shares of Salt River, Incorporated, for $752,000 cash. At January 1, 2022, Salt River's net assets had a total carrying amount of $526,400. Equipment (eight-year remaining life) was undervalued on Salt River's financial records by $104,000. Any remaining excess fair over book value was attributed to a database developed by Salt River (four-year remaining life), but not recorded on its books. Palmcroft applies the equity method to account for Its Investment In Salt River. Each year since the acquisition, Salt River has declared a $16,000 dividend. Salt River recorded net Income of $106,000 in 2022 and $118,700 in 2023. Selected account balances from the two companies' Individual records were as follows: Items 2024 Revenues 2024 Expenses 2024 Income from Salt River Retained earnings, 12/31/24 Palmcroft Salt River $ 605,000 $ 375,200 417,000 268,000 63,800 306,800 236,900 On Its December 31, 2024, consolidated balance sheet, what amount should Palmcroft report for Salt River's database? Multiple Choice $12,160 $30,400 $60,800 $24,320

          Required Information
On January 1, 2022, Palmcroft Company acquired 100 percent of the outstanding voting shares of Salt
River, Incorporated, for $752,000 cash. At January 1, 2022, Salt River's net assets had a total carrying
amount of $526,400. Equipment (eight-year remaining life) was undervalued on Salt River's financial
records by $104,000. Any remaining excess fair over book value was attributed to a database developed by
Salt River (four-year remaining life), but not recorded on its books. Palmcroft applies the equity method to
account for Its Investment In Salt River. Each year since the acquisition, Salt River has declared a $16,000
dividend. Salt River recorded net Income of $106,000 in 2022 and $118,700 in 2023.
Selected account balances from the two companies' Individual records were as follows:
Items
2024 Revenues
2024 Expenses
2024 Income from Salt River
Retained earnings, 12/31/24
Palmcroft
Salt River
$ 605,000
$ 375,200
417,000
268,000
63,800
306,800
236,900
On Its December 31, 2024, consolidated balance sheet, what amount should Palmcroft report for Salt River's database?
Multiple Choice
$12,160
$30,400
$60,800
$24,320

Required Information
On January 1, 2022, Palmcroft Company acquired 100 percent of the outstanding voting shares of Salt
River, Incorporated, for 752,000 cash. At January 1, 2022, Salt River's net assets had a total carrying
amount of526,400. Equipment (eight-year remaining life) was undervalued on Salt River's financial
records by 104,000. Any remaining excess fair over book value was attributed to a database developed by
Salt River (four-year remaining life), but not recorded on its books. Palmcroft applies the equity method to
account for Its Investment In Salt River. Each year since the acquisition, Salt River has declared a16,000
dividend. Salt River recorded net Income of 106,000 in 2022 and118,700 in 2023.
Selected account balances from the two companies' Individual records were as follows:
Items
2024 Revenues
2024 Expenses
2024 Income from Salt River
Retained earnings, 12/31/24
Palmcroft
Salt River
605,000 375,200
417,000
268,000
63,800
306,800
236,900
On Its December 31, 2024, consolidated balance sheet, what amount should Palmcroft report for Salt River's database?
Multiple Choice
12,16030,400
60,80024,320

Added by Patricia R.

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