Use this problem to answer the next three questions: On January 2, year 1, ABC Company purchased 75% of XYZ's outstanding common stock. On that date, the fair value of the 25% noncontrolling interest was $35,000. During year 1, XYZ had net income of $20,000. Selected balance sheet data at December 31, year 1, is as follows: ABC (Column 1), XYZ (Column 2) During year 1, ABC and XYZ paid cash dividends of $25,000 and $5,000, respectively, to their shareholders. There were no other intercompany transactions. In its December 31, year 1 consolidated statement of retained earnings, what amount should ABC report as dividends paid?
Use this problem to answer the next three questions: On January 2, year 1, ABC Company purchased 75% of XYZ's outstanding common stock. On that date, the fair value of the 25% noncontrolling interest was $35,000. During year 1, XYZ had net income of $20,000. Selected balance sheet data at December 31, year 1, is as follows: ABC (Column 1), XYZ (Column 2) During year 1, ABC and XYZ paid cash dividends of $25,000 and $5,000, respectively, to their shareholders. There were no other intercompany transactions. In its December 31, year 1 consolidated statement of retained earnings, what amount should ABC report as dividends paid?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Use this problem to answer the next three questions: On January 2, year 1, ABC Company purchased 75% of XYZ's outstanding common stock. On that date, the fair value of the 25% noncontrolling interest was $35,000. During year 1, XYZ had net income of $20,000. Selected balance sheet data at December 31, year 1, is as follows: ABC (Column 1), XYZ (Column 2) During year 1, ABC and XYZ paid cash dividends of $25,000 and $5,000, respectively, to their shareholders. There were no other intercompany transactions. In its December 31, year 1 consolidated statement of
![Total assets
$420,000
$120,000
$180,000
$ 60,000
Liabilities
Common stock
100,000
200,000
$420,000
50,000
Retained carnings
70,000
$180,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8c0ef745-85d1-440b-a45b-3f619cf66cf2%2Fd15805d6-0237-47e8-b15d-1c66383e2091%2F063lzz2_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Total assets
$420,000
$120,000
$180,000
$ 60,000
Liabilities
Common stock
100,000
200,000
$420,000
50,000
Retained carnings
70,000
$180,000
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