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amid [387]
3 years ago
14

On July 1, Year 1, Denver Corp. purchased 3,000 shares of Eagle Co.�s 10,000 outstanding shares of common stock for $20 per shar

e but did not elect the fair value option. On December 15, Year 1, Eagle paid $40,000 in dividends to its common shareholders. Eagle�s net income for the year ended December 31, Year 1, was $120,000, earned evenly throughout the year. In its Year 1 income statement, what amount of income from this investment should Denver report?
$36,000
$18,000
$12,000
$6,000
Business
1 answer:
FrozenT [24]3 years ago
3 0

Answer:

$18,000

Explanation:

On July 1, Year 1

Denver Corp. invested in E company holding:

= (3,000 ÷ 10,000) × 100

= 30% of share

Hence, the period of holding as on December 31, Year 1 is 6 months.

Net income for E co. for the year ended December 31, Year 1 = $120,000

Amount of income from this investment should Denver report:

= $120,000 × 30% × (6/12)

= $18,000

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Answer:

both blanks can be filled by <u>5%</u>

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malfutka [58]
Incentives is the answer


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Answer:The answer is a

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