On January 2,2013,Slurg Corporation Paid $600,000 to Acquire 20% Interest

question 1

Essay

On January 2,2013,Slurg Corporation paid $600,000 to acquire 20% interest in Padwaddy Inc.At that time,the book value of Padwaddy's stockholders' equity included $700,000 of common stock and $1,800,000 of retained earnings.All the excess purchase cost over the book value acquired was attributable to a patent with an estimated life of 10 years.Padwaddy paid $6,250 of dividends each quarter for the next two years,and reported net income of $180,000 for 2013 and $220,000 for 2014.Slurg recorded all activities related to their investment using the equity method.
Required:
1.Calculate Slurg's income from Padwaddy for 2013.
2.Calculate Slurg's income from Padwaddy for 2014.
3.Determine the balance of Slurg's Investment in Padwaddy account on December 31,2014.

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Definitions:

Southern Economy

Refers to the economic structure and characteristics dominant in the Southern United States, historically characterized by agriculture and plantation systems.

Plantations

Large agricultural estates typically found in tropical or subtropical regions that specialize in the mass production of a single cash crop, such as sugar, cotton, or tobacco.

Immigrant Population

Refers to individuals who have moved to a new country from their place of origin, often for reasons such as economic opportunity, refuge, or family reunification.

Hinton Helper

An American Southern critic of slavery known for his book "The Impending Crisis of the South," advocating for the abolition of slavery on economic grounds.