5) On January 8, 20X4, Simon Corp. purchased 20% of david Inc. preferred stock and 40% of its common stock. david's stock outstanding at December 31, 20X4, is as follows: 10% Cumulative Preferred Stock = $100,000 Common stock = $700,000 david Inc. reported net income of $60,000 and paid $10,000 in dividends to preferred shareholders for the year ended December 31, 20X4. How much total revenue should Simon record due to its investment in David, Inc.?a.$20,000b.$22,000c.$50,000d.$70,000

The correct answer is $22,000.Simon Corp. should report revenue from its investment in David Inc.…

Answered: 5) On January 8, 20X4, Simon Corp.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

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Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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5) On January 8, 20X4, Simon Corp. purchased 20% of david Inc. preferred stock and 40% of its common stock. david's stock outstanding at December 31, 20X4, is as follows:
	10% Cumulative Preferred Stock = $100,000
	Common stock = $700,000

	david Inc. reported net income of $60,000 and paid $10,000 in dividends to preferred shareholders for the year ended December 31, 20X4. How much total revenue should Simon record due to its investment in David, Inc.?
a.	$20,000
b.	$22,000
c.	$50,000
d.	$70,000