REFERENCE: Ref.01_13 On January 1,2008,Jackie Corp.purchased 30% of the Voting Common Stock

REFERENCE: Ref.01_13
On January 1,2008,Jackie Corp.purchased 30% of the voting common stock of Rob Co. ,paying $2,000,000.Jackie properly accounts for this investment using the equity method.At the time of the investment,Rob's total stockholders' equity was $3,000,000.Jackie gathered the following information about Rob's assets and liabilities whose book values and fair values differed:
Any excess of cost over fair value was attributed to goodwill,which has not been impaired.Rob Co.reported net income of $300,000 for 2008,and paid dividends of $100,000 during that year.
-What is the amount of excess amortization expense for Jackie Corp's investment in Rob Co.for the first year?

A) $0.
B) $30,000.
C) $40,000.
D) $55,000.
E) $60,000.

Correct Answer:

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