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QUESTION 1 p Company purchased 20% of the outstanding stock of Company on Jan 1, 2018 for $200.000. In 2016, Searned a net income of
QUESTION 1 p Company purchased 20% of the outstanding stock of Company on Jan 1, 2018 for $200.000. In 2016, Searned a net income of $100,000 and paid dividends of 330,000. In 2018. under the guilty method, the balance in the investment in Saccount in P's books on Dec 31 2018 will be $214.000 $220.000 $206,000 $200.000 QUESTION 2 Company P purchased 70% stock in Company Son Jan 1, 20x1 for $200,000. For the year 20X1, Company S reported a net income of $100.000 and paid dividends of $40,000. At year-end, investment account in the books of Company P had a fair market value of $175,000 Under the fair value method, 10 The unrealized loss will be credited with $25,000 The unrealized loss will be debited with $25,000. The unrealized gain will be credited with $25,000 The extraordinary loss will be debited with $25,000
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