Steam Room Inc. (SRI) has 15,000 shares issued in total. Assume that on January 1, 2021, Omega Corporation acquired 35% of SRI's shares for $45 per share. Omega is assumed to have significant influence over SRI and will use the equity method to account for its investments. For the year ended December 31, 2021, SRI reported profit of $800,000 and declared and paid $50,000 in cash dividends. At December 31, 2021, SRI's common shares were traded at $50 each but dropped to $35 by January 31, 2022. The ending balance of Omega's investment account in SRI on December 31, 2021 is $525,000. $498,750. $533,750. $560,000.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Steam Room Inc. (SRI) has 15,000 shares issued in total. Assume that on January 1, 2021, Omega Corporation acquired 35% of SRI's
shares for $45 per share. Omega is assumed to have significant influence over SRI and will use the equity method to account for its
investments. For the year ended December 31, 2021, SRI reported profit of $800,000 and declared and paid $50,000 in cash
dividends. At December 31, 2021, SRI's common shares were traded at $50 each but dropped to $35 by January 31, 2022. The ending
balance of Omega's investment account in SRI on December 31, 2021 is
$525,000.
$498,750.
$533,750.
O $560,000.
Transcribed Image Text:Steam Room Inc. (SRI) has 15,000 shares issued in total. Assume that on January 1, 2021, Omega Corporation acquired 35% of SRI's shares for $45 per share. Omega is assumed to have significant influence over SRI and will use the equity method to account for its investments. For the year ended December 31, 2021, SRI reported profit of $800,000 and declared and paid $50,000 in cash dividends. At December 31, 2021, SRI's common shares were traded at $50 each but dropped to $35 by January 31, 2022. The ending balance of Omega's investment account in SRI on December 31, 2021 is $525,000. $498,750. $533,750. O $560,000.
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