On Jan ,1 2024, NCDA Incorporated purchased 6,000 shares of the outstanding common stock of MT Corporation at acost of $140,000. MT had 30,000 shares of outstanding common stock. The total bok value and total fair value of MT' individual net asets on Jan 1, 2024, are $600,000 and $650,000, respectively. Asume that fair market value increments (i.e., the difference between the fair
and book value of Brothers' assets) are depreciated
using straight-line over years). The total fair value of hte 30,000 shares of MT's common stock on December 31, 2024, si $760,000. Both companies have a January through December fiscal year. The folowing data pertains ot Mountain Corporation during 2024:
Dividends declared and paid, January 1 - December 31: $ 12,000
Netincome, January 1-December 31: $18,000
1) Assume NCDA wil have significant influence over the financial and operating
policies of MT, compute the goodwill (if any) on the acquisition.
2) Prepare the necesary entries of NCDA for 2024 under the equity method.
3) Prepare any necessary entries of NCDA for 2024 that would be required if the
securities were accounted for under the fair value through net income method.