Homework Answers
| Answer D. $43,656 | |
| Purchase price of Steinbart Shares | $1,028,000 |
| Book Value of Steinbart Shares - $2400,000 X 40% | $ 960,000 |
| Trade Name | $ 68,000 |
| Life of Trade Name - in Years | 20 |
| Amortization of Trade Name per Annum | $ 3,400 |
| 2014 - Gross Profit Rate - $17400 / $116,000 | 15% |
| 2015 - Gross Profit Rate - $48180 / $219000 | 22% |
| 2015 - Alex Share in Steinbart Income - $128250 X 40% | $ 51,300 |
| Less: Amortization of Trade Name per Annum | -$ 3,400 |
| Add: Unrealized Gain on Inventory - 2014 - $29,000 X 15% (GP X 40% (Alex Share) | $ 1,740 |
| Less: Deferral of 2018 Unrealized Gain - $68000 X 22% (GP) X 40% (Alex Share) | -$ 5,984 |
| Equity Income in Steinbart | $ 43,656 |
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