Wildhorse Corporation purchased 34000 shares of common stock of the Sherman Corporation for $49 per share on January 2, 2017
Wildhorse Corporation purchased 34000 shares of common stock of the Sherman Corporation for $49 per share on January 2, 2017. Sherman Corporation had 100000 shares of common stock outstanding during 2018, paid cash dividends of $159000 during 2018, and reported net income of $590000 for 2018. Wildhorse Corporation should report revenue from investment for 2018 in the amount of
$220660
$146540
$54060
$200600
Homework Answers
Answer: C) $54,060
Since Wildhorse corporation holds 34,000 shares of Sherman corporation (ie: 34% of the shares) ((34000/100000)*100)
Total cash dividends paid by Sherman corporation = $159,000
Cash Dividend received by Wildhorse = 34% x $159,000 = $54,060
Thus the revenue to be recognized by wildhorse shall be $54,060
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Wildhorse Corporation purchased 34000 shares of common stock of the Sherman Corporation for $49 per share on January 2, 2017
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