Sunland, Inc. acquired 40% of Cheyenne Corporation's voting stock on January 1, 2021 for $940000. During 2021, Cheyenne earned $382000 and paid dividends of $238000. Sunland's 40% interest in Cheyenne gives Sunland the ability to exercise significant influence over Cheyenne's operating and financial policies. During 2022, Cheyenne earned $482000 and paid cash dividends of $138000 on April 1 and $138000 on October 1. On July 1, 2022, Sunland sold half of its stock in Cheyenne for $642000 cash. Before income taxes, what amount should Sunland include in its 2021 income statement as a result of the investment? $238000. $95200. $152800. $382000
Sunland, Inc. acquired 40% of Cheyenne Corporation's voting stock on January 1, 2021 for $940000. During 2021, Cheyenne earned $382000 and paid dividends of $238000. Sunland's 40% interest in Cheyenne gives Sunland the ability to exercise significant influence over Cheyenne's operating and financial policies. During 2022, Cheyenne earned $482000 and paid cash dividends of $138000 on April 1 and $138000 on October 1. On July 1, 2022, Sunland sold half of its stock in Cheyenne for $642000 cash. Before income taxes, what amount should Sunland include in its 2021 income statement as a result of the investment? $238000. $95200. $152800. $382000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Sunland, Inc. acquired 40% of Cheyenne Corporation's voting stock on January 1, 2021 for $940000. During 2021, Cheyenne earned $382000 and paid dividends of $238000. Sunland's 40% interest in Cheyenne gives Sunland the ability to exercise significant influence over Cheyenne's operating and financial policies. During 2022, Cheyenne earned $482000 and paid cash dividends of $138000 on April 1 and $138000 on October 1. On July 1, 2022, Sunland sold half of its stock in Cheyenne for $642000 cash.
Before income taxes, what amount should Sunland include in its 2021 income statement as a result of the investment?
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$238000. |
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$95200. |
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$152800. |
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$382000 |
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