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Kim, Inc. acquired 30% of Carne Corp.'s voting stock on January 1, 2012 for $360,000. During 2012, Carne earned $150,000 and paid dividends of $90,000.
Kim, Inc. acquired 30% of Carne Corp.'s voting stock on January 1, 2012 for $360,000. During 2012, Carne earned $150,000 and paid dividends of $90,000. Kim's 30% interest in Carne gives Kim the ability to exercise significant influence over Carne's operating and financial policies. During 2013, Carne earned $180,000 and paid dividends of $60,000 on April 1 and $60,000 on October 1. On July 1, 2013, Kim sold half of its stock in Carne for $237,000 cash. Before income taxes, what amount should Kim include in its 2012 income statement as a result of the investment? a. $27,000. b. $45,000. c. $90,000. d. $150,000
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