On January 1, 2021, an investor company acquired 25% of an investee company's common stock for $2,880, 000. As a result of this transaction, the investor can exert significant influence over the investee. During each year ended December 31, 2021 and 2022 the investee reported $576,000 of net income and $240,000 of dividends. On January 1, 2021, the book value of the investee's net assets was $9,600,000 and all individual net assets had appraised fair values that equaled their reported book values. On December 31, 2022, what is the balance of the Equity Investment account on the Investor's balance sheet? Select one: a. $3,048, 000 b. $2,880,000 c. $3, 552,000 d. $2,964,000
On January 1, 2021, an investor company acquired 25% of an investee company's common stock for $2,880, 000. As a result of this transaction, the investor can exert significant influence over the investee. During each year ended December 31, 2021 and 2022 the investee reported $576,000 of net income and $240,000 of dividends. On January 1, 2021, the book value of the investee's net assets was $9,600,000 and all individual net assets had appraised fair values that equaled their reported book values. On December 31, 2022, what is the balance of the Equity Investment account on the Investor's balance sheet? Select one: a. $3,048, 000 b. $2,880,000 c. $3, 552,000 d. $2,964,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Dinesh bhai
Transcribed Image Text:On January 1, 2021, an investor company acquired 25% of an investee company's common stock for $2,880, 000. As a
result of this transaction, the investor can exert significant influence over the investee. During each year ended December
31, 2021 and 2022 the investee reported $576,000 of net income and $240,000 of dividends. On January 1, 2021, the
book value of the investee's net assets was $9,600,000 and all individual net assets had appraised fair values that
equaled their reported book values. On December 31, 2022, what is the balance of the Equity Investment account on the
Investor's balance sheet? Select one: a. $3,048, 000 b. $2,880,000 c. $3,552,000 d. $2,964,000
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