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On January 2, abc co. purchased 10% of xyz co's outstanding common stock for $400,000 which equaled the carrying amount and fair value of 10%
On January 2, abc co. purchased 10% of xyz co's outstanding common stock for $400,000 which equaled the carrying amount and fair value of 10% of XYZ net assets. ABC is the largest stockholder in XYZ and ABC has a majority of seats on XYZ's board of directors. XYZ reported net income of $500,000 for the current year and paid total cash dividends of $150,000. On its December 31 balance sheet, what amount should ABC report as its investment in XYZ?
A. $450,000
B. $435,000
C. $400,000
D. $385,000
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