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algol13
3 years ago
10

Tamarisk Corporation acquired a 39% interest in Sheffield Company on January 1, 2021, for $490,000. At that time, Sheffield had

1,000,000 shares of its $1 par common stock issued and outstanding. During 2021, Sheffield paid cash dividends of $162,000 and thereafter declared and issued a 5% common stock dividend when the fair value was $2 per share. Sheffield's net income for 2021 was $356,000. What is the balance in Tamarisk's equity investment account at the end of 2021
Business
1 answer:
seropon [69]3 years ago
8 0

Answer:

$565,660

Explanation:

Calculation for the balance in Tamarisk's equity investment account at the end of 2021

Cost$490,000

Share of net income $138,840

(.39 × $356,000)

Less Share of dividends ($63,180)

(.39 × $162,000)

Balance in equity investment account$565,660

Therefore the balance in Tamarisk's equity investment account at the end of 2021 will be $565,660

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3 years ago
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