Answer:
The gain on the sale of investment is $145,325
Explanation:
In determining the gain on the sale of half of the stock,the first thing to do would be determine the cost of the stock sold such that the cost can then be compared with the proceeds from the sale of the investment so as to determine the gain therein.
The total investment should be valued in such a way that the share of profits should be added to the investment while the dividends received would be deducted.
Jan,1 2021 $890,000
Share of profit($367,000*30%) $110,100
less dividends(since it already received in cash
($228,000*30%) ($68,400
)
Value of investment at 31 Dec,2021 $931,700
Share of profit(30%*$467000)*6/12 $70,050
Dividends(30%$128,000) ($38,400
)
Value of investment as at 1 july 2022 $963,350
Note that as at I july 2022 Marigold Corporation is only entitled to half year profits on the investment as well as half year dividends
Cost of half of investment=$963,350*1/2=$ 481,675.00
Gain= proceeds-cost=$627,000- 481,675 =$145,325
