Question
The summarized balance sheets of the Sun Company and the Moon Company as pf December 31, 19x4, are as follows: SUN COMPANY Balance Sheet December
The summarized balance sheets of the Sun Company and the Moon Company as pf December 31, 19x4, are as follows:
SUN COMPANY
Balance Sheet
December 31, 19x4
Assets $600,000
Liabilities 150,000
Capital stock 300,000
Retained earnings 150,000
Total equities 600,000
MOON COMPANY
Balance Sheet
December 31, 19x4
Assets $400,000
Liabilities 100,000
Capital stock 250,000
Retained earnings 50,000
Total equities 400,000
If the Sun Company acquired a 100% interest in the Moon Company on December 31, 19x4, for $270,000, and if during 19x5 the Moon Company had net income of $22,000 and paid a cash dividend of $7,000, applying the cost method would give a debit balance in the Investment in Stock account of the Moon Company at the end of 19x5 of
A. $285,000.
B. $283,500.
c. $276,300.
D. $270,000.
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