Jimmy Company holds 30% of the common stock and 50% of the cumulative preference shares of Stars Company. At December 31, 2020, there were 40,000,000 common shares and 10,000,000 10 percent cumulative preference shares outstanding for Stars. For the year that concluded on December 31, 2020, Stars recorded a profit of 8,000,000. Listed and compensated stars Dividends on 1,550,000 preference shares in 2020. 2019 saw no preference share dividend payments from Stars. What is the total amount that James Company will include in its 2020 profit or loss from these investments?

Jimmy Company holds 30% of the common stock and 50% of the cumulative preference shares of Stars Company. At December 31, 2020, there were 40,000,000 common shares and 10,000,000 10 percent cumulative preference shares outstanding for Stars. For the year that concluded on December 31, 2020, Stars recorded a profit of 8,000,000. Listed and compensated stars Dividends on 1,550,000 preference shares in 2020. 2019 saw no preference share dividend payments from Stars. What is the total amount that James Company will include in its 2020 profit or loss from these investments?

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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