Question
The Salmon Corporation (Salmon) reported net income for the current year of $200,000 and paid cash dividends of $30,000. The Pond Company (Pond) holds 22
The Salmon Corporation (Salmon) reported net income for the current year of $200,000 and paid cash dividends of $30,000. The Pond Company (Pond) holds 22 percent, or 22,000 shares, of the outstanding voting stock of Salmon. However, another corporation holds the other 78 percent ownership and does not take Ponds input into consideration when making financing and operating decisions for Salmon. As such, Pond has little to no influence over the operations of Salmon. Salmon Companys stock increased in value by $0.02 per share over the current year. What investment income should Pond recognize for the current year?
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