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Q1- Company P purchased 70% stock in Company S on Jan 1, 20X1 for $200,000. For the year 20X1, Company S reported the net income of $100,000 and paid dividends of $40,000. At year end, investment account in the books of Company P had a fair market value of $225,000. Under the fair value method, the unrealized gain account will be credited with: a- SO b- $25,000 c- $53,000 d- $67,000

Q1- Company P purchased 70% stock in Company S on Jan 1, 20X1 for $200,000. For the year 20X1, Company S reported the net income of $100,000 and paid dividends of $40,000. At year end, investment account in the books of Company P had a fair market value of $225,000. Under the fair value method, the unrealized gain account will be credited with: a- SO b- $25,000 c- $53,000 d- $67,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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QI- Company P purchased 70% stock in Company S on Jan 1, 20x1 for $200,000. For the year 20X1, Company S reported the net income of $100,000 and paid dividends of $40,000. At year end, investment account in the books of Company P had a fair market value of $225,000. Under the fair value method, the unrealized gain account will be credited with: a- SO b- $25,000 c- $53,000 d- $67,000
Transcribed Image Text:QI- Company P purchased 70% stock in Company S on Jan 1, 20x1 for $200,000. For the year 20X1, Company S reported the net income of $100,000 and paid dividends of $40,000. At year end, investment account in the books of Company P had a fair market value of $225,000. Under the fair value method, the unrealized gain account will be credited with: a- SO b- $25,000 c- $53,000 d- $67,000
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