Subsidiary Company S had the following stockholders equity on December 31, 2017, prior to distributing a 10%

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Subsidiary Company S had the following stockholders’ equity on December 31, 2017, prior to distributing a 10% stock dividend:

Common stock ($1 par), 100,000 shares issued and outstanding Paid-in capital in excess of par Retained

The fair value of the shares distributed is $50 each. What is the effect of this dividend on the subsidiary equity, the investment account, and the December 31, 2017, elimination procedures? Assume the parent uses the simple equity method to account for its investment in the subsidiary.

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Advanced Accounting

ISBN: 978-1305084858

12th edition

Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng

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