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XYZ Corporation owns 25% of the common stock of ABC Enterprises and uses the fair-value method to account for this investment. ABC reported net income of $200,000 for 2022 and paid dividends of $80,000 on December 15, 2022. How much income should XYZ recognize on this investment in 2022? A. $20,000 B. $30,000 C. $50,000 D. $60,000

XYZ Corporation owns 25% of the common stock of ABC Enterprises and uses the fair-value method to account for this investment. ABC reported net income of $200,000 for 2022 and paid dividends of $80,000 on December 15, 2022. How much income should XYZ recognize on this investment in 2022? A. $20,000 B. $30,000 C. $50,000 D. $60,000

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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Please provide the accurate answer to this financial accounting problem using appropriate methods.

XYZ Corporation owns 25% of the common stock of ABC Enterprises and uses the fair-value method to account for this investment. ABC reported net income of $200,000 for 2022 and paid dividends of $80,000 on December 15, 2022. How much income should XYZ recognize on this investment in 2022? A. $20,000 B. $30,000 C. $50,000 D. $60,000
Transcribed Image Text:XYZ Corporation owns 25% of the common stock of ABC Enterprises and uses the fair-value method to account for this investment. ABC reported net income of $200,000 for 2022 and paid dividends of $80,000 on December 15, 2022. How much income should XYZ recognize on this investment in 2022? A. $20,000 B. $30,000 C. $50,000 D. $60,000
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