Answered: Ivanhoe, Inc. acquired 30% of Tamarisk…

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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Ivanhoe, Inc. acquired 30% of Tamarisk Corporation's voting stock on January 1, 2021 for $ 1020000. During 2021, Tamarisk earned $ 406000 and paid dividends of $ 254000. Ivanhoe's 30% interest in Tamarisk gives Ivanhoe the ability to exercise significant influence over Tamarisk's operating and financial policies. During 2022, Tamarisk earned $ 506000 and paid cash dividends of $ 154000 on April 1 and $ 154000 on October 1. On July 1, 2022, Ivanhoe sold half of its stock in Tamarisk for $ 666000 cash.

The carrying amount of this investment in Ivanhoe's December 31, 2021 balance sheet should be

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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