On January 1, 2021, Ildiko Corporation purchased a 35% interest in the common shares of Rance Ltd. for $60,000. Rance Ltd. reported profit and paid dividends as follows: 2020 - profit $40,000; dividends paid $50,000 2021-profit $88,000; dividends paid $70,000. Assume that Ildiko Corporation uses the equity method to account for its investment in Rance Ltd. The balance in the "Investment Income" account on Ildiko's Income Statement for the year ended December 31, 2021 is $62,800 $61,750 $5,250 $43,750

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On January 1, 2021, Ildiko Corporation purchased a 35% interest in the
common shares of Rance Ltd. for $60,000. Rance Ltd. reported profit and
paid dividends as follows:
2020-profit $40,000; dividends paid $50,000
2021 - profit $88,000; dividends paid $70,000.
Assume that Ildiko Corporation uses the equity method to account for its
investment in Rance Ltd.
The balance in the "Investment Income" account on Ildiko's Income
Statement for the year ended December 31, 2021 is
$62,800
O $61,750
O $5,250
$43,750
Transcribed Image Text:On January 1, 2021, Ildiko Corporation purchased a 35% interest in the common shares of Rance Ltd. for $60,000. Rance Ltd. reported profit and paid dividends as follows: 2020-profit $40,000; dividends paid $50,000 2021 - profit $88,000; dividends paid $70,000. Assume that Ildiko Corporation uses the equity method to account for its investment in Rance Ltd. The balance in the "Investment Income" account on Ildiko's Income Statement for the year ended December 31, 2021 is $62,800 O $61,750 O $5,250 $43,750
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