Puddle Incorporated Purchased an 80% Interest in Soake Company,located in England.Puddle

question 1

Essay

Puddle Incorporated purchased an 80% interest in Soake Company,located in England.Puddle paid $1,560,000 on January 1,2014,at a time when the book values of Soake equaled the fair values.Any excess cost/book value differential was attributed to a patent with a five-year remaining useful life.Soake's books are kept in the functional currency,pounds.A summary of Soake's equity is shown below for the first year that Puddle had ownership interest.

Required:
Determine Puddle's income from Soake for 2014,and the balance of Puddle's Investment in Soake account at December 31,2014.

---

Definitions:

Investors

Individuals or entities that allocate capital with the expectation of receiving financial returns.

Premium

An amount paid in addition to the standard or original price, often for insurance, bonds, or faster service.

Shares Of Common Stock

Units of ownership in a corporation, providing shareholders with a proportion of the company's profits and voting rights.

Price-Earnings Ratio

A financial ratio that compares a company's market price per share to its earnings per share, indicating the value that investors place on a company's earning capacity.