Business, 18.01.2021 21:10 o9623199

Posada Company acquired 7,000 of the 10,000 outstanding shares of Sabathia Company on January 1, 2019, for $840,000. The subsidiary's total fair value was assessed at $1,200,000 although its book value on that date was $1,130,000. The $70,000 fair value in excess of Sabathia's book value was assigned to a patent with a five-year remaining life. On January 1, 2021, Posada reported a $1,085,000 equity method balance in the Investment in Sabathia Company account. On October 1, 2021, Posada sells 1,000 shares of the investment for $191,000. During 2021, Sabathia reported net income of $120,000 and declared dividends of $40,000. These amounts are assumed to have occurred evenly throughout the year. a. How should Posada report the 2021 income that accrued to the 1,000 shares prior to their sale

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Posada Company acquired 7,000 of the 10,000 outstanding shares of Sabathia Company on January 1, 201...

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