On January 1, 2020, Keith Company paid $96,000 for 8,000 shares of Jerry Company common stock. The ownership in Jerry Company is 20%, this is the only stock investment held by Keith, and Keith Company can exercise significant influence over Jerry Company. Jerry reported net income of $52,000 for the year ended December 31, 2020. Jerry declared and paid dividends of $.50 per share during the year ended December 31, 2020. The stock market price of Jerry stock on December 31, 2020 was $25 per share. 8. What amount will be reported in the 12/31/20 balance sheet of Keith Company for the investment in Jerry at December 31, 2020? a. $96,000 b. $102,400 c. $200,000 d. $202,400
On January 1, 2020, Keith Company paid $96,000 for 8,000 shares of Jerry Company common
stock. The ownership in Jerry Company is 20%, this is the only stock investment held by Keith, and
Keith Company can exercise significant influence over Jerry Company. Jerry reported net income of
$52,000 for the year ended December 31, 2020. Jerry declared and paid dividends of $.50 per share
during the year ended December 31, 2020. The stock market price of Jerry stock on December 31,
2020 was $25 per share.
8. What amount will be reported in the 12/31/20 balance sheet of Keith Company for the investment in
Jerry at December 31, 2020?
a. $96,000
b. $102,400
c. $200,000
d. $202,400
9. What total amount will Keith Company report on its 2020 income statement related to the
investment in Jerry Company?
a. $10,400
b. $4,000
c. $108,000
d. $114,400
10. On January 1, 2021, Keith Company sells all 8,000 of its shares of Jerry Company common stock for
$25 per share. How much gain or loss does Keith Company report on its 2021 income statement
related to this sale?
a. $0
b. $104,000
c. $93,600
d. $97,600
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
