Financial accounting Major bought 100% of Medium. On January 1, Year 1, for$8,000,000. Annual amortization of $40,000 resulted from thisacquisition. Medium reported a net income of $500,000 in Year1 and paid $100,000 in dividends. What is the Investment inMedium Co. balance on Major's books as of December 31, Year1, if the equity method has been applied?a. $8,000,000b. $8,460,000c. $8,400,000d. $8,360,000

Step 1:The company implied the equity method. As per the equity method, the original investment is…

Answered: Major bought 100% of Medium. On January…

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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On December 30, Year 3, Varsity Corporation sold its investment in marketable equity securities costing $800,000 for $860,000 cash. The securities were purchased on January 2, Year 1, and the market value of the securities was $820,000 and $780,000 on December 31, Year 1 and Year 2, respectively. How much gain or loss will Varsity report in its income statement for the year ending December 31, Year 3? Multiple Choice A $40,000 gain. An $80,000 gain. A $20,000 loss. A $60,000 gain..
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