Russell, Inc. acquired 30% of Dayton Corporation\'s voting stock on January 1, 2

Question

Russell, Inc. acquired 30% of Dayton Corporation's voting stock on January 1, 2014 for $800,000. During 2014, Dayton earned $320,000 and paid dividends of $200,000. Russell's 30% interest in Dayton gives Russell the ability to exercise significant influence over Dayton's operating and financial policies. During 2015, Dayton earned $400,000 and paid dividends of $120,000 on April 1 and $120,000 on October 1. On July 1, 2015, Russell sold half of its stock in Dayton for $528,000 cash.

What should be the gain on sale of this investment in Russell's 2015 income statement?

$80,000

None of these answers are correct

$98,000

$128,000

$110,000

Explanation / Answer

Therefore the correct answer is option C.

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