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25 October, 15:31

On January 1, 2017, Grand Haven, Inc., reports net assets of $945,300 although equipment (with a four-year remaining life) having a book value of $510,000 is worth $591,500 and an unrecorded patent is valued at $45,000. Van Buren Corporation pays $857,440 on that date to acquire an 80 percent equity ownership in Grand Haven. If the patent has a remaining life of nine years, at what amount should the patent be reported on Van Buren's consolidated balance sheet at December 31, 2018?

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  1. 25 October, 19:09
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    patent on the consolidated estament: 32,000

    Explanation:

    45,000 x 80% = 36,000

    36,000 / 9 = 4,000 amortization per year

    patent of Grand heaven

    debit credit

    36,000 recognize at purchase

    4,000 december 31th amortization

    32,000 balance.
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