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On January 1, 2021, Lear Company purchased 37% of Bunker Company's common stock for $360,000. During...

On January 1, 2021, Lear Company purchased 37% of Bunker Company's common stock for $360,000. During 2021, Bunker Company reported a net income of $129,000 and paid dividends totaling $43,000. In 2022, Bunker Company reported a net income of $81,000 and paid dividends totaling $17,000. On December 31, 2022, Lear Company sold one-fourth of its investment in Bunker Company for $112,970 cash. Calculate the amount of investment revenue related to the investment in Bunker Company reported on Lear Company's 2021 income statement.

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Answer #1

Amount of investment revenue related to the investment in Bunker Company reported on Lear Company's 2021 income statement = Net income of Bunker Company x Percentage of holdings

= 129,000 x 37%

= $47,730

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