Partridge purchased a 60% interest in Sparrow on January 1, 20X1, for $240,000. At the time of the purchase, Sparrow had the following stockholders' equity: Any excess is attributable to equipment with a 10-year life. On January 1, 20X6, the retained earnings of Sparrow was $175,000. The entire investment was sold for $300,000 on January 1, 20X6. The gain was ____.
A)$87,000
B)$90,000
C)$27,000
D)$78,000

Question

Partridge purchased a 60% interest in Sparrow on January 1, 20X1, for $240,000. At the time of the purchase, Sparrow had the following stockholders' equity:  Any excess is attributable to equipment with a 10-year life. On January 1, 20X6, the retained earnings of Sparrow was $175,000. The entire investment was sold for $300,000 on January 1, 20X6. The gain was ____.
A)$87,000 
B)$90,000 
C)$27,000 
D)$78,000

Quizplus · Accepted Answer

Determination and Distribution of Excess Schedule:
 11eb11de_92f4_06ac_ad38_53686b3d961e_TB2014_00 
 11eb11de_92f4_2dbd_ad38_f52dfe8507a1_TB2014_00

Partridge Purchased a 60% Interest in Sparrow on January 1