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Tap the link and enter the password: 355893 https://cutt.ly/Vl50Lvn

adi47

14.12.2020

$18,000

Explanation:

Required:

Find the amount of income Perimeter recognizes in 20X1 as a result of the investment.

Amount of income to be recognized should be calculated as:

Share of net income - Amortization of equipment in excess of book value

Where,

Share of net income = 30% of net income

= 30% × $80,000

= $24,000

Less: Amortization of equipment in excess of book value =

$\frac{160,000 - 60,000}{5 yrs} * 0.30$

$= \frac{100,000}{5} * 0.30$

= 6,000

Therefore, amount of income to be recognized =

$24,000 - $6,000

= $18,000

Amount of income Perimeter recognizes in 20X1 as a result of this investment is $18,000

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