Homework Answers
Option (d) $ 280,000 is Right answer
Balance on 31st December, 2020 mean its total value of investment.
= Original investment + 25% share in Net income – 25% of cash dividend paid
|
Explanation |
Amount |
|
Common stock ( Original cost) |
$ 1,800,000 |
|
Add : 25 % share of Net Income ( $ 1,200,000 *25 % ) |
$ 300,000 |
|
Less : 25 % share of Cash Dividend ( $ 600,000 * 25 % ) |
( $ 150,000) |
|
Balance on 31st December, 2020 |
$ 1,950,000 |
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