On January 3, 2011, Jenkins Corp

question 118

Essay

On January 3, 2011, Jenkins Corp. acquired 40% of the outstanding common stock of Bolivar Co. for $1,200,000. This acquisition gave Jenkins the ability to exercise significant influence over the investee. The book value of the acquired shares was $950,000. Any excess cost over the underlying book value was assigned to a patent that was undervalued on Bolivar's balance sheet. This patent has a remaining useful life of ten years. For the year ended December 31, 2011, Bolivar reported net income of $312,000 and paid cash dividends of $96,000.
Required:
Prepare a schedule to show the balance Jenkins should report as its Investment in Bolivar Co. at December 31, 2011.

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Definitions:

Plasma Cells

Immune cells that secrete large quantities of antibodies, derived from B cells, critical for the humoral immune response.

In Vitro

A process, experiment, or procedure performed in a controlled environment outside of a living organism.

Active Immunity

Immunity that results from the production of antibodies by the immune system in response to the presence of an antigen.

Chicken Cholera

A contagious bacterial disease affecting chickens, characterized by severe respiratory distress, diarrhea, and high mortality.