On January 3, 2023, Sheppard Corporation purchased 15% of Meredith Corporation's common stock for $ 64 comma 000$64,000. Meredith's net income for the years ended December 31, 2023 and 2024 were $18,000 and $56,000 respectively. Meredith declared no dividends during 2023; however, during 2024, the company declared a $70,000 dividend. On December 31, 2023, the fair value of Meredith's stock that Sheppard Corporation owned had increased to $ 71 comma 000$71,000; in 2024, it increased again to $ 76 comma 000$76,000. What will be the carrying value of the investment at the end of December 31, 2024?
On January 3, 2023, Sheppard Corporation purchased 15% of Meredith Corporation's common stock for $ 64 comma 000$64,000. Meredith's net income for the years ended December 31, 2023 and 2024 were $18,000 and $56,000 respectively. Meredith declared no dividends during 2023; however, during 2024, the company declared a $70,000 dividend. On December 31, 2023, the fair value of Meredith's stock that Sheppard Corporation owned had increased to $ 71 comma 000$71,000; in 2024, it increased again to $ 76 comma 000$76,000. What will be the carrying value of the investment at the end of December 31, 2024?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter13: Corporations: Earning & Profits And Distributions
Section: Chapter Questions
Problem 19P
Related questions
Question
On January 3, 2023, Sheppard Corporation purchased 15% of Meredith Corporation's common stock for
$ 64 comma 000$64,000.
Meredith's net income for the years ended December 31, 2023 and 2024 were $18,000 and $56,000 respectively. Meredith declared no dividends during 2023; however, during 2024, the company declared a $70,000 dividend. On December 31, 2023, the fair value of Meredith's stock that Sheppard Corporation owned had increased to
$ 71 comma 000$71,000;
in 2024, it increased again to
$ 76 comma 000$76,000.
What will be the carrying value of the investment at the end of December 31, 2024?
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