Grant, Inc., acquired 30% of South Co.'s voting stock for $200,000 on January 2, Year 1, and did not elect the fair value option. The price equaled the carrying amount and the fair value of the interest purchased in South's net assets. Grant's 30% interest in South gave Grant the ability to exercise significant influence over South's operating and financial policies. During Year 1, South earned $80,000 and paid dividends of $50,000. South reported earnings of $100,000 for the 6 months ended June 30, Year 2, and $200,000 for the year ended December 31, Year 2. On July 1, Year 2, Grant sold half of its stock in South for $150,000 cash. South paid dividends of $60,000 on October 1, Year 2.
In its Year 2 income statement, what amount should Grant report as gain from the sale of half of its investment?
A. $30,500
B. $45,500
C. $35,000
D. $24,500
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Grant, Inc., acquired 30% of South Co.'s voting stock for $200,000 on January 2, Year 1, and did not elect the fair value option. The price ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
True/False - According to CP-38 Disclosure of Affiliated Business Arrangements, a licensee is required to disclose any affiliated business arrangement in which the licensee has a 1% or more interest when an offer to purchase real property is fully
Answers (1)
Ariel holds a $5,000 portfolio that consists of four stocks. Her investment in each stock, as well as each stockâs beta, is listed in the following table: Stock Investment Beta Standard Deviation Andalusian Limited (AL) $1,750 0.90 18.
Answers (1)
Which of the following transactions is most likely to be recognized on a firm's statement of changes in equity? A) Buying a machine from an equipment dealer. B) Declaring a dividend on common shares. C) Investing cash in an exchange-traded fund.
Answers (1)
Alexandra owns stock in a corporation, and she just received 100 additional shares of stock as part of the corporation's distribution of profits for the current quarter. What is this distribution called? A. Dividends B. Negative equity C.
Answers (1)
Banks primarily use the money in savings accounts to O pay Federal Deposit Insurance Corporation (FDIC) premiums. O pay for community improvements. O issue municipal bonds. provide loans to consumers.
Answers (1)
New Questions in Business
Ten years ago, Jacobson Recovery purchased a wrecker for $285,000 to move disabled 18-wheelers. He anticipated a salvage value of $50,000 10 years after the initial purchase. During this time his average annual revenue totaled $52,000.
Answers (1)
Using what you have learned in your focus group, you begin your analysis of the buyer decision process. In the first stage of the process, you need to show consumers that their existing state does not equal their desired state.
Answers (1)
When demand curves intersect, the curve with the larger slope in absolute value (the steeper demand curve) is more elastic?
Answers (1)
Economies of scale are ways that a company can lower the cost per unit by selling more units overall A. True B. False
Answers (1)
Suppose warren buffet withdraws $1 million from his checking account at chase manhattan bank. if the required reserve ratio is 20 percent, what is the maximum change in deposits in the banking system?
Answers (1)