On July 1, 20x1, Sanchez Corporation acquired 3,000 shares (20% ownership) of Beal Corporation common stock...

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On July 1, 20x1, Sanchez Corporation acquired 3,000 shares (20% ownership) of Beal Corporation common stock at $40 per share plus brokerage fees of $600. The investment of $120,000 was $6,000 greater than 20% of the equity of Beal because inventory was understated by $30,000. Beal reported net income of $270,000 for the year and paid dividends of $2 per share at the end of each quarter. The market value of the Beal shares is $42 per share at December 31, 20x1. Under the cost method, what would Sanchez report in the December 31, 20x1 income statement for this investment? On July 1, 20x1, Sanchez Corporation acquired 3,000 shares (20% ownership) of Beal Corporation common stock at $40 per share plus brokerage fees of $600. The investment of $120,000 was $6,000 greater than 20% of the equity of Beal because inventory was understated by $30,000. Beal reported net income of $270,000 for the year and paid dividends of $2 per share at the end of each quarter. The market value of the Beal shares is $42 per share at December 31, 20x1. Under the cost method, what would Sanchez report in the December 31, 20x1 income statement for this investment?

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Since Sanchez Corporation acquired the shares of Beal Corporation at a cost of 120000 3000 shares x ... View the full answer