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31 October, 05:44

Gaw Company owns 15% of the common stock of Trace Corporation and used the fair-value method to account for this investment. Trace reported net income of $110,000 for 2018 and paid dividends of $60,000 on October 1, 2018. How much income should Gaw recognize on this investment in 2018?

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  1. 31 October, 06:06
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    The income should Gaw recognize on this inverstment is $ 16500.

    Explanation:

    The net income should recognize on inverstment = $ 110000*15%

    = $ 16500

    therefore, the income should Gaw recognize on this inverstment is $ 16500.
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