Potion Corporation acquires 30% of the outstanding voting common shares of the Formula Corporation for $600,000 . Potion Corporation acquires the investment in Formula Corporation by buying previously issued shares of Formula Corporation from other investors. Between the time of the acquisition and the end of Potion Corporation's next accounting period, Formula Corporation reports earnings of
$80,000; and pays a dividend of $30,000 to holders of its common stock. Formula Corporation reports earnings of $100,000 and pays dividends of $40,000 during the subsequent accounting period. During the next accounting period, Potion Corporation sells one-fourth of its investment in Formula Corporation for $165,000 . After the sale, the balance in the Investment in Stock of Formula Corporation account is:
a. $462,750
b. $465,750
c. $474,750
d. $481,750
e. $486,750
C
You might also like to view...
In a corporation, capital resulting from the retention of earnings is entered in the ____________________ account
Fill in the blank(s) with correct word
What happens when merchandise is delivered FOB Destination?
A. The buyer pays the freight cost. B. The seller pays the freight cost. C. The seller records transportation-out expense. D. The seller pays the freight cost and records an expense.
The salary paid to the president of a company would be classified on the income statement as a(n):
A. direct labor cost. B. administrative expense. C. selling expense. D. manufacturing overhead cost.
Inga Suave has a revolving department store credit card with an annual percentage rate of 18%. Her previous month's balance is $826.39. During August, she has purchases of $289.16, returns of $29.99, and made a payment of $126.50. The store uses the unpaid balance method to calculate finance charges. a.What is the amount of the finance charge for August?b.What is Inga's new balance?
What will be an ideal response?