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On January 1, 2011, Rider Corporation purchased 40% of the outstanding stock of ArapahoeCorporation for $770,000. Net income reported by Arapahoe Corporation for 2011 was
On January 1, 2011, Rider Corporation purchased 40% of the outstanding stock of ArapahoeCorporation for $770,000. Net income reported by Arapahoe Corporation for 2011 was $120,000.Dividends paid by Arapahoe Corporation during 2011 were $70,000. At the end of the year themarket value of the Arapahoe Corporation stock was $795,000. The amount of investment revenuethat Rider should recognize for 2011 is:
A. $20,000
B. $36,000
C. $48,000
D. $28,000
E. $70,000
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