Surrell Inc. owns 30% of the outstanding voting common stock of Vicker Co. and has the ability to significantly influence the investee's operations and decision making. On January 1, 2019, the balance in the Investment in Vicker Co. account was $402,000. Amortization associated with this acquisition is $10,800 per year. During 2019, Vicker earned an income of $108,000 and paid cash dividends of $36,000. Previously in 2018, Vicker had sold inventory costing $28,800 to Surrell for $48,000. All but 25% of this merchandise was consumed by Surrell during 2018. The remainder was used during the first few weeks of 2019. Additional sales were made to Surrell in 2019; inventory costing $33,600 was transferred at a price of $60,000. Of this total, 40% was not consumed until 2020. What amount of equity income would Surrell have recognized in 2019 from its ownership interest in Vicker? $9,936. $24,840. $19,872. $21, 114. $18,948.

Surrell Inc. owns 30% of the outstanding voting common stock of Vicker Co. and has the ability to significantly influence the investee's operations and decision making. On January 1, 2019, the balance in the Investment in Vicker Co. account was $402,000. Amortization associated with this acquisition is $10,800 per year. During 2019, Vicker earned an income of $108,000 and paid cash dividends of $36,000. Previously in 2018, Vicker had sold inventory costing $28,800 to Surrell for $48,000. All but 25% of this merchandise was consumed by Surrell during 2018. The remainder was used during the first few weeks of 2019. Additional sales were made to Surrell in 2019; inventory costing $33,600 was transferred at a price of $60,000. Of this total, 40% was not consumed until 2020. What amount of equity income would Surrell have recognized in 2019 from its ownership interest in Vicker? $9,936. $24,840. $19,872. $21, 114. $18,948.

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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