Kim Company acquired 30% of Kourtney Company's voting stock for $200,000 on January 2, 2019. During 2019, Kourtney earned $80,000 and paid dividends of $50,000. Kourtney reported earnings of $100,000 for the six months ended June 30, 2020, and $200,000 for the year ended December 31, 2020. On July 1, 2020, Kim sold half of its stock in Kourtney for $150,000 cash. Kourtney paid dividends of $60,000 on October 1, 2020. In its 2020 income statement, how much should Kim report as gain from the sale of half of its investment?
Kim Company acquired 30% of Kourtney Company's voting stock for $200,000 on January 2, 2019. During 2019, Kourtney earned $80,000 and paid dividends of $50,000. Kourtney reported earnings of $100,000 for the six months ended June 30, 2020, and $200,000 for the year ended December 31, 2020. On July 1, 2020, Kim sold half of its stock in Kourtney for $150,000 cash. Kourtney paid dividends of $60,000 on October 1, 2020. In its 2020 income statement, how much should Kim report as gain from the sale of half of its investment?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Kim Company acquired 30% of Kourtney Company's voting stock for $200,000 on January 2, 2019. During 2019, Kourtney earned $80,000 and paid dividends of $50,000. Kourtney reported earnings of $100,000 for the six months ended June 30, 2020, and $200,000 for the year ended December 31, 2020. On July 1, 2020, Kim sold half of its stock in Kourtney for $150,000 cash. Kourtney paid dividends of $60,000 on October 1, 2020. In its 2020 income statement, how much should Kim report as gain from the sale of half of its investment?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education