On February 2, 2020, Groove Company purchased 15% of Pop Company's common stock for $54,000. Pop's net income for the years ended December 31, 2020, and December 31, 2021, were $16,000 and $54,000, respectively. On July 30, 2020, Pop declared and paid a dividend of $66,500. On December 31, 2020, the fair value of the Pop stock owned by Groove had increased to $72,000. How much should Groove show in the 2020 income statement as income from this investment? Multiple Choice $18.000. $9.975. $24,000. $27,975. < Prev 5 of 16 Next >

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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On February 2, 2020, Groove Company purchased 15% of Pop Company's common stock for $54,00O. Pop's net income for the years ended December
31, 2020, and December 31, 2021, were $16,000 and $54,000, respectively. On July 30, 2020, Pop declared and paid a dividend of $66,500. On
December 31, 2020, the fair value of the Pop stock owned by Groove had increased to $72,000. How much should Groove show in the 2020 income
statement as income from this investment?
Multiple Choice
$18,000.
$9,975.
$24,000.
$27,975.
< Prev
5 of 16
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Transcribed Image Text:On February 2, 2020, Groove Company purchased 15% of Pop Company's common stock for $54,00O. Pop's net income for the years ended December 31, 2020, and December 31, 2021, were $16,000 and $54,000, respectively. On July 30, 2020, Pop declared and paid a dividend of $66,500. On December 31, 2020, the fair value of the Pop stock owned by Groove had increased to $72,000. How much should Groove show in the 2020 income statement as income from this investment? Multiple Choice $18,000. $9,975. $24,000. $27,975. < Prev 5 of 16 Next >
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