Question
On January 1 year 1 Taraz Company purchased 4,000 shares of the common stock of Company A for 240,000. At the time, Company A had
On January 1 year 1 Taraz Company purchased 4,000 shares of the common stock of Company A for 240,000. At the time, Company A had a total of 10,000 common shares outstanding. Accordingly Taraz purchased 40% of the outstanding shares of Company a. During Year 1 Company A paid cash dividends totaling 20,000. Company A also reported net income of 50,000 during year 1. During Year 2 Company A paid no cash dividends. Company A reported a net loss of 40,000 during Year 2. On December 31, Year 1, the market value of Company A's common stock was 72 per share. On Taraz Company's books what amount should be reported as "Investment in Company A" as December 31 of Year 2?
A. 243,000
B. 236,000
C. 260,000
D. 257,000
E. 272,000
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