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Required information Skip to question [The following information applies to the questions displayed below.] Company T had 35,000 outstanding shares of common stock, par value

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[The following information applies to the questions displayed below.]

Company T had 35,000 outstanding shares of common stock, par value $15 per share. On January 1 of the current year, Company P purchased some of Company Ts shares as a long-term investment at $26 per share. At the end of the current year, Company T reported the following: income, $54,000, and cash dividends declared during the year, $25,500. The fair value of Company T stock at the end of the current year was $23 per share.

Required:

1. For each of the following situations, identify the method of accounting that Company P should use.

accounting method
5,600 shares purchased
13,300 shares purchased

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