Instrument Corporation has the following investment which was held throughout 2021–2022. Assume the organization has invested in stock and holds 40%. Fair Value Cost 12/31/21 Equity investment $900,000 $1,200,000 A. Record the initial investment. B. Total dividends paid equal $400,000. Record the dividends. C. Total Net Income for the year equals $600,000. Record the income. D. If Instrument increased its investment to 55%, what would occur? Explain your answer.

Instrument Corporation has the following investment which was held throughout 2021–2022. Assume the organization has invested in stock and holds 40%. Fair Value Cost 12/31/21 Equity investment $900,000 $1,200,000 A. Record the initial investment. B. Total dividends paid equal $400,000. Record the dividends. C. Total Net Income for the year equals $600,000. Record the income. D. If Instrument increased its investment to 55%, what would occur? Explain your answer.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Instrument Corporation has the following investment which was held throughout 2021–2022. Assume the organization has invested in stock and holds 40%.

Fair Value

Cost 12/31/21

Equity investment $900,000 $1,200,000

A. Record the initial investment.

B. Total dividends paid equal $400,000. Record the dividends.

C. Total Net Income for the year equals $600,000. Record the income.

D. If Instrument increased its investment to 55%, what would occur? Explain your answer.

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