On 1st january 2010 dawson incorporated paid 100000 for a

Reference no: EM13370400

On 1st January, 2010, Dawson, Incorporated, paid $100,000 for a 30% interest in Sacco Corporation. This investee had assets with a book value of $550,000 and liabilities of $300,000. A patent held by Sacco having a book value of $10,000 was really worth $40,000 with a six year remaining life. Any goodwill related with this acquisition is considered to have an indefinite life. In 2010, Sacco reported income of $50,000 and paid dividends of $20,000 while in 2011 it reported income of $75,000 and dividends of $30,000. Suppose Dawson has the ability to significantly influence the operations of Sacco.

Find he equity in income of Sacco for 2010

Reference no: EM13370400

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