On January 4, 2018, Mason Co. purchased 40,000 shares (40%) of the common stock of Hefly Corp., paying $560,000. At that time, the book value and fair value of Hefly's net assets was $1,400,000. The investment gave Mason the ability to exercise significant influence over the operations of Hefly. During 2018, Hefly reported income of $150,000 and paid dividends of $40,000. On January 2, 2019, Mason sold 10,000 shares for $150,000.What is the appropriate journal entry to record the sale of the 10,000 shares? A)Cash150,000 Investment in Hefly 150,000B)Cash150,000 Investment in Hefly 130,000 Gain on sale of investment 20,000C)Cash150,000 Loss on investment1,000 Investment in Hefly 151,000D)Cash150,000 Investment in Hefly 149,000 Gain on sale of
investment 1,000E)Cash150,000 Loss on sale of investment10,000 Investment in Hefly 160,000
A. A Above.
B. D Above.
C. E Above.
D. C Above.
E. B Above.
Answer: D
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The following information was obtained from the accounts of Marion Company: Inventory, January 1 .................................. $30,000 Purchases ............................................. 45,000 Purchase Returns and Allowances ....................... 5,000 Purchase Discounts .................................... 4,000 Freight-In ............................................ 5,000 Inventory,
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