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On January 4, 2010, Trycker, Inc

question 74

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On January 4, 2010, Trycker, Inc. acquired 40% of the outstanding common stock of Inkblot Co. for $2,400,000. This investment gave Trycker the ability to exercise significant influence over Inkblot. Inkblot's assets on that date were recorded at $8,000,000 with liabilities of $2,000,000. There were no other differences between book and fair values. During 2010, Inkblot reported net income of $500,000 and paid dividends of $300,000. The fair value of Inkblot at December 31, 2010 is $7,000,000. Trycker elects the fair value option for its investment in Inkblot.
At what amount will Inkblot be reflected in Trycker's December 31, 2010 balance sheet?


Definitions:

Service Recovery

Service Recovery involves a company's efforts to rectify a problem following a service failure, aiming to restore customer satisfaction.

Procedural Fairness

The degree to which the processes and procedures used in decision making are perceived as just, equitable, and without bias.

Delivery Gap

The difference between customer expectations for service delivery and the actual service delivered.

Service Failure

A situation where a service does not meet a customer's expectations, leading to dissatisfaction or complaints.

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