31· 3.03 points Assume that, on January 1, 2016, Matsul Co. paid $3,571,200 for

Question

31· 3.03 points Assume that, on January 1, 2016, Matsul Co. paid $3,571,200 for its investment in 115,200 shares of Yankee Inc. Further, assume that Yankee has 320,000 total shares of stock issued. The book value and fair value of Yankee's Identifiable net assets were both $640,000 at January 1, 2016. The following Information pertains to Yankee during 2016: $320,000 $96,000 Net Income Dividends declared and paid Market price of common stock on 12/31/2016 $33/share What amount would Matsul report in its year-end 2016 balance sheet for its investment in Yankee? O $3987200 O None of these answer choices is correct $3,651,840 O $3,667200. MacBook Air esc F1 F3 baFa F2 FS F6

Explanation / Answer

The Answer is "C".

Calculation :-

Particulars Amount ($) Investment value on jan. 1, 2016 3571200 Add : Income (115200/320000)*$320000 115200 Less : Dividend (115200/320000)*$96000 (34560) Investment value on Dec. 31, 2016 3651840

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