Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Dell owns the below listed equity investment in Fiji Corporation which was purchased at the beginning of 2021. On January 30, 2022, Dell sold its
Dell owns the below listed equity investment in Fiji Corporation which was purchased at the beginning of 2021. On January 30, 2022, Dell sold its investment for $47.50 per share.
Per Share Data | ||||
# Shares Owned by Dell | Ownership Held by Dell | Dell's Cost | Fiji's Market Value on 12/31/21 | Fiji's Annual Dividend paid on 12/31/21 |
50,000 | 15% | $40.00 | $46.00 | $0.75 |
Which of the following best describes the impact of the sale on Dell's 2022 net income?
a. The sales price minus the original cost of Fiji is included in net income.
b. The sale of Fiji does not impact net income.
c. Only the sales price of Fiji is included in net income.
d. The sales price minus the 12/31/21 market value of Fiji is included in net income.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started