Jaynes Inc. acquired all of Aaron Co.s common stock on January 1, 2010, by issuing 11,000 shares of $1 par value common stock.  Jaynes shares had a $17 per share fair value.  On that date, Aaron reported a net book value of $120,000.  However, its equipment (with a five-year remaining life) was undervalued by $6,000 in the companys accounting records.  Any excess of consideration transferred over fair value of assets and liabilities is assigned to an unrecorded patent to be amortized over ten years.  What balance would Jaynes Investment in Aaron Co. account have shown on December 31, 2010, when the equity method was applied for this acquistion? (Show your work.)

 

The following figures came fromteh individual accounting records of these two companies as of December31,2010:

                          Haynes Inc.   Aaron Co.      

Revenues                  720000       276000 

Expenses                  528000       144000  

Investment income         Not given     ----

Dividends paid            100000       60000

 

The following figures came from the individual accounting records of these two companies as of December 31, 2011:

 

Revenue                   840000       336000

Expenses                  552000       180000

Investment income         Not given    ------

Dividends paid            110000       50000

Equipment                 600000       360000

Retained earnings,

12/31/11 balance          960000       216000

If this combination is viewed as an acquisition what balance would Jaynes  “investment in Aaron Co. account have shown on December 31 2010 when the equity method was applied.