Puddle Incorporated Purchased an 80% Interest in Soake Company, Located

question 28

Essay

Puddle Incorporated purchased an 80% interest in Soake Company, located in England.Puddle paid $1,560,000 on January 1, 2011, 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 2011, and the balance of Puddle's Investment in Soake account at December 31, 2011.

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Definitions:

Dependent

Relating to someone who relies on another person for support, especially in terms of financial or emotional needs.

Homicide Rate

The number of homicides in a defined area (such as a country, city, or neighborhood) over a specified period, often reported per 100,000 people.

Elderspeak

A condescending way of speaking to older adults that resembles baby talk, with simple and short sentences, exaggerated emphasis, repetition, and a slower rate and a higher pitch than used in normal speech.

Older Adult

An individual who is typically aged 65 years or older, entering the later stages of life.