On January 3, 2013, Jenkins Corp

question 42

Essay

On January 3, 2013, Jenkins Corp. acquired 40% of the outstanding common stock of Bolivar Co. for $1,200,000. This acquisition gave Jenkins the ability to exercise significant influence over the investee. The book value of the acquired shares was $950,000. Any excess cost over the underlying book value was assigned to a patent that was undervalued on Bolivar's balance sheet. This patent has a remaining useful life of ten years. For the year ended December 31, 2013, Bolivar reported net income of $312,000 and paid cash dividends of $96,000.
Required:
Prepare a schedule to show the balance Jenkins should report as its Investment in Bolivar Co. at December 31, 2013.