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Required information Prancer Inc. ( Prancer ) purchased 4 0 , 0 0 0 voting shares out of Starter Corporation's 5 0 , 0 0

Required information
Prancer Inc. (Prancer) purchased 40,000 voting shares out of Starter Corporation's 50,000 outstanding voting shares for $320,000 on January 1,2023.
On the date of acquisition, Starter's common shares and retained earnings were valued at $120,000 and $180,000, respectively. Starter's book values approximated its fair values on the acquisition date with the exception of a patent and a trademark, neither of which had been previously recorded. The fair values of the patent and trademark on the date of acquisition were $15,000 and $45,000 respectively.
On January 2,2023, Prancer sold 7,000 shares of Starter on the open market for $84,000.
Prancer uses the equity method to account for its investment in Starter.
Which of the following is the amount of gain or loss on the sale of the 7,000 shares?
Multiple Choice
Prey
4
5
of 12
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