On january 1, 20x8, polo corporation acquired 75 percent of stallion company's voting common stock for $300,000. at the time of the combination, stallion reported common stock outstanding of $200,000 and retained earnings of $150,000, and the fair value of the noncontrolling interest was $100,000. the book value of stallion's net assets approximated market value except for patents that had a market value of $50,000 more than their book value. the patents had a remaining economic life of ten years at the date of the business combination. stallion reported net income of $40,000 and paid dividends of $10,000 during 20x8.

39) based on the preceding information, what balance will polo report as its investment in stallion at december 31, 20x8, assuming polo uses the equity method in accounting for its investment?

a) $318,750

b) $317,500

c) $330,000

d) $326,250

Suppose that a monopolistically competitive restaurant is currently serving 260 meals per day (the output where mr

mark, a civil engineer, entered into a contract with david. as per the contract, mark agreed to design and build a house for david for a specified fee. mark provided david with an estimation of the total cost and the contract was mutually agreed upon. however, during construction, when mark increased the price due to a miscalculation on his part, david refused to pay the amount. this scenario is an example of a mistake.

Exercise 18-15 sheffield appliance center is an experienced home appliance dealer. sheffield appliance center also offers a number of services for the home appliances that it sells. assume that sheffield appliance center sells ovens on a standalone basis. sheffield appliance center also sells installation services and maintenance services for ovens. however, sheffield appliance center does not offer installation or maintenance services to customers who buy ovens from other vendors. pricing for ovens is as follows. oven only $790 oven with installation service 850 oven with maintenance services 970 oven with installation and maintenance services 990 in each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at $180. additionally, the incremental amount charged by sheffield appliance center for installation approximates the amount charged by independent third parties. ovens are sold subject to a general right of return. if a customer purchases an oven with installation and/or maintenance services, in the event sheffield appliance center does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $790. assume that a customer purchases an oven with both installation and maintenance services for $990. (b) indicate the amount of revenue that should be allocated to the oven, the installation, and to the maintenance contract.