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Question: On January 1, 2011, Anderson Company purchased 40% of the voting common stock of Company for $2,000,000, approximated book value. Barney which During 2011, Barney paid dividends of $30,000 and reported a net loss of $70,000. What amount of equity income would Anderson recognize in 2011 from its ownership interest in Barney? A. $12,000 income. B. $12,000 loss. C. $16,000 loss. D. $28,000 income. E. $28,000 loss.

Question: On January 1, 2011, Anderson Company purchased 40% of the voting common stock of Company for $2,000,000, approximated book value. Barney which During 2011, Barney paid dividends of $30,000 and reported a net loss of $70,000. What amount of equity income would Anderson recognize in 2011 from its ownership interest in Barney? A. $12,000 income. B. $12,000 loss. C. $16,000 loss. D. $28,000 income. E. $28,000 loss.

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 11MCQ
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Question: On January 1, 2011, Anderson Company purchased 40% of the voting common stock of Company for $2,000,000, approximated book value. Barney which During 2011, Barney paid dividends of $30,000 and reported a net loss of $70,000. What amount of equity income would Anderson recognize in 2011 from its ownership interest in Barney? A. $12,000 income. B. $12,000 loss. C. $16,000 loss. D. $28,000 income. E. $28,000 loss.
Transcribed Image Text:Question: On January 1, 2011, Anderson Company purchased 40% of the voting common stock of Company for $2,000,000, approximated book value. Barney which During 2011, Barney paid dividends of $30,000 and reported a net loss of $70,000. What amount of equity income would Anderson recognize in 2011 from its ownership interest in Barney? A. $12,000 income. B. $12,000 loss. C. $16,000 loss. D. $28,000 income. E. $28,000 loss.
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