2) Larkin the ability to significantly influence Devon. The following informatio

Question

2) Larkin the ability to significantly influence Devon. The following information relates to Larkin's investment in Devon during the most recent year: Carrying amount of Larkin's investment in Devon at the beginning of the year $200,000 Net income of Devon for the year Total dividends paid to Devons stockholders during the year Co. has owned 25% of the common stock of Devon Co. for a number of years and has $600,000 $400,000 What is the carrying amount of Larkin's investment in Devon at year-end? A) $100,000 B) $200,000 C) $250,000 D) $350,000

Explanation / Answer

Calculate carrying amount of Larkin's investment at year end :

so answer is c) $250,000

Carrying amount of Larkin's investment at beginning of the year 200000 Add: Share in Net income (600000*25%) 150000 Less: Dividend (400000*25%) (100000) Carrying amount of Larkin's investment at year end 250000

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