Chapter 3 Quiz On January 1, 2XX0, Cheap Camera Corp. paid $3,080,000 to acquire Worldwide Photo, Inc. Cheap Camera used the equity method to account for the investment. The following information is available for the assets, liabilities, and stockholders' equity accounts of Worldwide Photo: Book Value Fair Value $880,000 $880,000 Current assets Land Building (twenty-year life) 380,000 480,000 1,020,000 1,240,000 Equipment (five-year life) 740,000 760,000 Current liabilities Long-term liabilities 160,000 160,000 260,000 260,000 Common stock 560,000 Additional paid-in capital 1,200,000 Retained earnings 840,000 Worldwide Photo earned net income for 2XX0 of $500,000 and paid dividends of $72,000 during the year. The 2XX0 consolidation entry to reverse Cheap Camera's recognition of Worldwide Photo's income and dividends in the current year would include a net credit to Equity Investment for: Select one: a. $428,000 x b. $72,000 O 11:47 AM 5/14/2024
Chapter 3 Quiz On January 1, 2XX0, Cheap Camera Corp. paid $3,080,000 to acquire Worldwide Photo, Inc. Cheap Camera used the equity method to account for the investment. The following information is available for the assets, liabilities, and stockholders' equity accounts of Worldwide Photo: Book Value Fair Value $880,000 $880,000 Current assets Land Building (twenty-year life) 380,000 480,000 1,020,000 1,240,000 Equipment (five-year life) 740,000 760,000 Current liabilities Long-term liabilities 160,000 160,000 260,000 260,000 Common stock 560,000 Additional paid-in capital 1,200,000 Retained earnings 840,000 Worldwide Photo earned net income for 2XX0 of $500,000 and paid dividends of $72,000 during the year. The 2XX0 consolidation entry to reverse Cheap Camera's recognition of Worldwide Photo's income and dividends in the current year would include a net credit to Equity Investment for: Select one: a. $428,000 x b. $72,000 O 11:47 AM 5/14/2024
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Chapter 3 Quiz
On January 1, 2XX0, Cheap Camera Corp. paid $3,080,000 to acquire Worldwide Photo, Inc. Cheap Camera used the equity method to account for the
investment. The following information is available for the assets, liabilities, and stockholders' equity accounts of Worldwide Photo:
Book Value Fair Value
$880,000
$880,000
Current assets
Land
Building (twenty-year life)
380,000 480,000
1,020,000 1,240,000
Equipment (five-year life)
740,000 760,000
Current liabilities
Long-term liabilities
160,000 160,000
260,000 260,000
Common stock
560,000
Additional paid-in capital
1,200,000
Retained earnings
840,000
Worldwide Photo earned net income for 2XX0 of $500,000 and paid dividends of $72,000 during the year.
The 2XX0 consolidation entry to reverse Cheap Camera's recognition of Worldwide Photo's income and dividends in the current year would include a net
credit to Equity Investment for:
Select one:
a. $428,000 x
b. $72,000
O
11:47 AM
5/14/2024
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