AUSTERE Co. owns 20% of SEVERE, Inc.'s ordinary shares. SEVERE also has outstanding redeemable preference shares with dividend rate of 6% and aggregate par value of $8,000,000. During the year, SEVERE reported profit of $4,000,000 and declared 150,000 cash dividend to preference shareholders. How much is AUSTERE's share in the profit of SEVERE? 1.704,000 2.800,000 3.512,000 4.770,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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AUSTERE Co. owns 20% of SEVERE, Inc.'s ordinary shares. SEVERE also has outstanding redeemable
preference shares with dividend rate of 6% and aggregate par value of $8,000,000. During the year,
SEVERE reported profit of $4,000,000 and declared $150,000 cash dividend to preference shareholders.
How much is AUSTERE's share in the profit of SEVERE?
1.704,000
2.800,000
3.512,000
4.770,000
Transcribed Image Text:AUSTERE Co. owns 20% of SEVERE, Inc.'s ordinary shares. SEVERE also has outstanding redeemable preference shares with dividend rate of 6% and aggregate par value of $8,000,000. During the year, SEVERE reported profit of $4,000,000 and declared $150,000 cash dividend to preference shareholders. How much is AUSTERE's share in the profit of SEVERE? 1.704,000 2.800,000 3.512,000 4.770,000
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