In 2023, Fuel reported net income of $500,000 and paid dividends of $20,000. What was the reported balance of Nelson's Investment in Fuel Co. at December 31, 2023?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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During January 2023, Nelson, Inc. acquired 40% of the outstanding common stock of Fuel
Co. for $1,800,000. This investment gave Nelson the ability to exercise significant influence
over Fuel. Fuel's assets on that date were recorded at $7,000,000 with liabilities of
$4,000,000. Any excess of cost over book value of Nelson's investment was attributed to
unrecorded patents having a remaining useful life of ten years.
In 2023, Fuel reported net income of $500,000 and paid dividends of $20,000. What was
the reported balance of Nelson's Investment in Fuel Co. at December 31, 2023?
O a $1,968,000
Ob $3,000.000
O $2,100,000
Od $1,800,000
Oe $2.224.000
Transcribed Image Text:During January 2023, Nelson, Inc. acquired 40% of the outstanding common stock of Fuel Co. for $1,800,000. This investment gave Nelson the ability to exercise significant influence over Fuel. Fuel's assets on that date were recorded at $7,000,000 with liabilities of $4,000,000. Any excess of cost over book value of Nelson's investment was attributed to unrecorded patents having a remaining useful life of ten years. In 2023, Fuel reported net income of $500,000 and paid dividends of $20,000. What was the reported balance of Nelson's Investment in Fuel Co. at December 31, 2023? O a $1,968,000 Ob $3,000.000 O $2,100,000 Od $1,800,000 Oe $2.224.000
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