Question 20(Use the following information of Ashley Company to answer the next three questions.)On January 1, 2018, Ashley Company purchased 2,000 of the 10,000 outstanding shares of Judd, Inc's common stock for $60,000. In 2018, Judd ddividend of $4 per share and reported net income of $80,000 for the year. On December 31, 2018, the market value of Judd stock has increased toIf Ashley Company treats the Judd stock investment as a minority, passive investment and classifies it as trading securities, what amount should Asof net income in 2018 from this investment?O $8,000O $14,000Ⓒ$6,000O $16,000

To calculate the net income from the investment in Judd, Inc.'s common stock, you need to consider…

Answered: On January 1, 2018, Ashley Company…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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