Reference no: EM132732125

Question - Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2020, for $200,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2021, Milani purchased an additional 30 percent of Seida for $606,000 which resulted in significant influence over Seida. On that date, the fair value of Seida's common stock was $2,020,000 in total. Seida's January 1, 2021, book value equaled $1,870,000, although land was undervalued by $139,000. Any additional excess fair value over Seida's book value was attributable to a trademark with an eight-year remaining life. During 2021, Seida reported income of $331,000 and declared and paid dividends of $102,000.

Required -

Record the 40% income earned during period by Seida.

Record 2021 amortization for trademark excess fair value.

Record dividend declaration from Seida.

Record collection of dividend from investee.