Goldman Company reports net income of $140,000 each year and pays an annual cash dividend of $50,000.

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Goldman Company reports net income of $140,000 each year and pays an annual cash dividend of $50,000. The company holds net assets of $1,200,000 on January 1, 2012. On that date, Wallace purchases 40 percent of the outstanding stock for $600,000, which gives it the ability to significantly influence Goldman. At the purchase date, the excess of Wallace's cost over its proportionate share of Goldman's book value was assigned to goodwill. On December 31, 2014, what is the Investment in Goldman Company balance (equity method) in Wallace's financial records?
a. $600,000.
b. $660,000.
c. $690,000.
d. $708,000.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Advanced Accounting

ISBN: 978-0078025402

11th edition

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik

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