ray corporation owns a 40 percent interest in the outstanding common stock of ton co 4373172

Ray Corporation owns a 40 percent interest in the outstanding common stock of Ton Corporation, having acquired its interest for $4,800,000 on January 1, 2011, when Ton’s stockholders’ equity was $8,000,000. The fair value/book value differential was assigned to inventories that were undervalued by $200,000 and sold in 2011, to equipment with a four-year remaining life that was undervalued by $400,000, and to goodwill for the remainder. The balance of Ton’s stockholders’ equity at December 31, 2014, is $11,000,000, and all changes therein are the result of income earned and dividends paid. Required Determine the balance of Ray’s investment in Ton at December 31, 2014. View Solution:
Ray Corporation owns a 40 percent interest in the outstanding

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