On January 1, 2017, Price Company purchased 40% of Sean Company's 30,000 shares of voting common stock for a cash payment of $1,800,000 when 40% of the net book value of Sean Company was $1,740,000. The payment in excess of the net book value was attributed to depreciable assets with a remaining useful life of six years. As a result of this transaction Price has the ability to exercise significant influence over Sean Company's operating and financial policies. Sean's net income for the ended December 31, 2017 was $600,000. During 2017, Sean paid $325,000 in dividends to its shareholders. What is the ending balance in Price's investment account as of December 31, 2017?
On January 1, 2017, Price Company purchased 40% of Sean Company's 30,000 shares of voting common stock for a cash payment of $1,800,000 when 40% of the net book value of Sean Company was $1,740,000. The payment in excess of the net book value was attributed to depreciable assets with a remaining useful life of six years. As a result of this transaction Price has the ability to exercise significant influence over Sean Company's operating and financial policies. Sean's net income for the ended December 31, 2017 was $600,000. During 2017, Sean paid $325,000 in dividends to its shareholders. What is the ending balance in Price's investment account as of December 31, 2017?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:On January 1, 2017, Price Company purchased 40% of Sean Company's 30,000 shares of voting common stock for a cash payment
of $1,800,000 when 40% of the net book value of Sean Company was $1,740,000. The payment in excess of the net book value was
attributed to depreciable assets with a remaining useful life of six years. As a result of this transaction Price has the ability to exercise
significant influence over Sean Company's operating and financial policies. Sean's net income for the ended December 31, 2017 was
$600,000. During 2017, Sean paid $325,000 in dividends to its shareholders.
What is the ending balance in Price's investment account as of December 31, 2017?
a. 1,910,000
b. 2,030,000
c. 1,800,000
d. 1,900,000
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