Fraw Company owns 15% of the common stock of Trace Corporation and used the cost method...
Fraw Company owns 15% of the common stock of Trace Corporation and used the cost method to account for this investment. Trace reported net income of $110,000 for 2018 and paid dividends of $60,000 on October 1, 2018. How much income should Fraw recognize on this investment in 2018?
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$16,500 |
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$9,000 |
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$50,000 |
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$25,500. |
Homework Answers
Answer:- $7500
Explanation:-
Net income = 110000×15% = $16500
Cashs dividends = 60000 × 15% = $9000
INCOME FROM INVESTMENT = $ 16500 - 9000 = $ 7500
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Fraw Company owns 15% of the common stock of Trace Corporation
and used the cost method...
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