The Following Information Pertains to Questions

question 52

Multiple Choice

The following information pertains to questions
On January 1,2009,Hanson Inc.purchased 54,000 of Marvin Inc.'s 90,000 outstanding voting shares for $240,000.On that date,Marvin's common stock and retained earnings were valued at $60,000 and $90,000 respectively.Marvin's book values approximated its fair values on the acquisition date with the exception of the company's equipment,which was estimated to have a fair market value that was $50,000 in excess of its recorded book value.The equipment was estimated to have a useful life of eight years.Both companies use straight line amortization exclusively.
On January 1,2010,Hanson purchased an additional 9,000 shares of Marvin Inc.on the open market for $45,000.On this date,Marvin's book values were equal to its fair market values with the exception of the company's equipment,which is now thought to be undervalued by $60,000.Moreover,the equipment's estimated useful life was revised to 4 years on this date.
Marvin's net Income and dividends for 2009 and 2010 are as follows: Marvin's goodwill was subject to an impairment loss of $5,000 during 2009.Hanson ABC Inc.uses the equity method to account for its investment in Marvin Inc.
-What would be the balance in Hanson's investment in Marvin account on December 31,2010?

• A)$236,000
• B)$200,000
• C)$303,000
• D)$304,625.

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Definitions:

Idea Creation

is the process of generating new, innovative concepts or solutions within a business or creative context.

Environmental Hazards

Potential sources of danger to the environment and human health, including pollutants, chemicals, and natural events that pose risks.

Product Innovation

The creation of new products or significant improvements to existing products, often to meet new needs or market demands.

Product Innovation

The development and introduction of new or significantly improved goods or services.