On January 2, 2019, Portela Inc. bought 30% of the outstanding common stock of Bracero Corporation for

Question:

On January 2, 2019, Portela Inc. bought 30% of the outstanding common stock of Bracero Corporation for $258,000 cash. Portela accounts for this investment by the equity method. At the date of acquisition of the stock, Bracero’s property, plant, and equipment had a fair value in excess of its book value of $150,000. Bracero’s property, plant, and equipment has a remaining life of 10 years. Bracero’s net income for the year ended December 31, 2019, was $180,000. During 2019, Bracero declared and paid cash dividends of $20,000. On December 31, 2019, Portela should have carried its investment in Bracero in the amount of:
a. $258,000
b. $301,500
c. $306,000
d. $312,000

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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