This Question: 1 pt 6 of 21 (0 complete) ? This Quiz: 25 pts possible 0t On Janu

Question

This Question: 1 pt 6 of 21 (0 complete) ? This Quiz: 25 pts possible 0t On January 1, 2017, Barry Corporation paid $800,000 for 100,000 shares of Oak Company's common stock, which represents 40% of Oak's outstanding common stock. For the year ending December 31. 2017, Oak reported net income of $240,000 and declared and paid cash dividends of $50,000. Barry should report the investment in Oak Company on its balance sheet at December 31, 2017 at OA. $800,000. O B. $876,000. O c. $724,000. O D. $820,000. Click to select your answer.

Explanation / Answer

SOLUTION

Barry should report the investment of $876,000.

Amount ($) Common stock 800,000 Net Income ($240,000*40%) 96,000 Dividends ($50,000*40%) (20,000) Investments 876,000

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