Question
BOBBY D. COMPANY PURCHASED 27% OF BIG E COMPANY FOR $1,700,000. THE TOTAL SHARES PURCHASED BY BOBBY D. COMPANY WERE 45,000 SHARES. BIG E COMPANY
BOBBY D. COMPANY PURCHASED 27% OF BIG E COMPANY FOR $1,700,000. THE TOTAL SHARES PURCHASED BY BOBBY D. COMPANY WERE 45,000 SHARES. BIG E COMPANY HAD NET INCOME OF $180,000 FOR THE YEAR. BIG E COMPANY PAID OUT A TOTAL OF $30,000 IN CASH DIVIDENDS. BIG E COMPANYS STOCK PRICE HAD A FAIR VALUE OF $46 AS OF THE END OF BOBBY D. COMPANYS YEAR. EXPLAIN HOW BOBBY D. COMPANY REPORTS THIS INFORMATION ON ITS YEAR END BALANCE SHEET AND CURRENT YEAR INCOME STATEMENT, USING THE INFORMATION GIVEN ABOVE ABOUT BIG E COMPANY. BOBBY D. COMPANY HAS DECIDED TO FOLLOW THE GENERAL RULES AND NOT THE OPTIONAL METHOD.
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