Provide solution this general accounting question Gaw Company owns 15% of the common stock of TraceCorporation and used the fair-value method to account forthis investment. Trace reported net income of $110,000 for2011 and paid dividends of $60,000 on October 1, 2011.How much income should Gaw recognize on this investmentin 2011?a. $16,500.b. $9,000.c. $25,500.d. $7,500.e. $50,000.

Explanation: When an investment is made in the shares of a company and such company declares any…

Answered: Gaw Company owns 15% of the common…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 18P

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Gaw Company owns 15% of the common stock of Trace Corporation and used the fair-value method to account for this investment. Trace reported net income of $110,000 for 2018 and paid dividends of $60,000 on October 1, 2018. How much income should Gaw recognize on this investment in 2018? What I have 110000 * .15= 16500
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