Question
On February 2, 2020, Groove Company purchased 16% of Pop Company's common stock for $57,000. Pop's net income for the years ended December 31, 2020,
On February 2, 2020, Groove Company purchased 16% of Pop Company's common stock for $57,000. Pop's net income for the years ended December 31, 2020, and December 31, 2021, were $18,000 and $56,000, respectively. On July 30, 2020, Pop declared and paid a dividend of $63,500. On December 31, 2020, the fair value of the Pop stock owned by Groove had increased to $73,000. How much should Groove show in the 2020 income statement as income from this investment?
Multiple Choice
- $26,160.
- $10,160.
- $22,000.
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Survey of Accounting
Authors: Thomas P. Edmonds, Frances M. McNair, Philip R. Olds, Bor Yi
3rd Edition
978-1259683794, 77490835, 1259683796, 9780077490836, 978-0078110856
