Question
On April 1, 2019, Village Company purchased 25,000 ordinary shares of Sulo Co. at 180 per share, a price that approximates book value as of
On April 1, 2019, Village Company purchased 25,000 ordinary shares of Sulo Co. at 180 per share, a price that approximates book value as of that date. At the time of the purchase. Sulo had 100,000 ordinary shares outstanding. Village had no ownership interest in Sulo before the purchase. The first quarter statement ending March 31, 2019 of Sulo recorded earnings of 480,000. For the year ended December 31, 2019. Sulo reported profit of 2,400,000. Sulo paid Village dividends of 60,000 on June 1 and again 60,000 on December 31, 2019. During 2020, Sulo reported profit of 2,000,000 and paid dividends of 2,000,000 to its shareholders. On January 1, 2021, Village sold 10,000 ordinary shares of Sulo for 200 per share. For the year ended December 31, 2021, the reported profit of Sulo was 2,500,000 and dividends of 60,000 were paid to Village. The market value of Sulo shares remained unchanged during the year 2021. The carrying value of Village Company's investment in Sulo on December 31, 2019 was
4.860.000
4,980,000
4,500,000
3,916,000
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