MC Qu. 94 LO 12-05 Assume that, on January 1, 2013... Assume that, on January 1,
ID: 2500870 • Letter: M
Question
MC Qu. 94 LO 12-05 Assume that, on January 1, 2013...
Assume that, on January 1, 2013, Matsui Co. paid $1,656,000 for its investment in 82,800 shares of Yankee Inc. Further, assume that Yankee has 230,000 total shares of stock issued. The book value and fair value of Yankee's identifiable net assets were both $460,000 at January 1, 2013. The following information pertains to Yankee during 2013:
None of the above is correct.
$1,955,000.
$1,725,000.
$1,713,960.
Assume that, on January 1, 2013, Matsui Co. paid $1,656,000 for its investment in 82,800 shares of Yankee Inc. Further, assume that Yankee has 230,000 total shares of stock issued. The book value and fair value of Yankee's identifiable net assets were both $460,000 at January 1, 2013. The following information pertains to Yankee during 2013:
Explanation / Answer
% of holding = 82800 /230000 = .36 or 36%
Investment value = cost +share in net income - dividend share
= 1656000 + (230000*.36) -(69000 *.36)
= 1656000 + 82800 - 24840
= 1713960
correct option is "D"
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