Anchor Co. owns 40% of Main Co.'s common stock outstanding and 75% of Main's noncumulative preferred stock outstanding. Anchor exercises significant influence over Main's operations. During the current period, Main declared dividends of $200,000 on its common stock and $100,000 on its noncumulative preferred stock. What amount of dividend income should Anchor report on its Income Statement for the period related to its investment in Main?

155,000

Explanation:

Anchor Co. owns 40% of Main Co.'s common stock outstanding and

75% of Main's noncumulative preferred stock outstanding.

Anchor exercises significant influence over Main's operations.

During the current period, Main declared dividends of

$200,000 on its common stock and

$100,000 on its noncumulative preferred stock.

The amount of dividend income that Anchor should report on its Income Statement for the period related to its investment in Main is:

Ordinary dividends 0.40 x 200,000 = 80,000

Preference dividends 0.75 x 100,000 = 75,000

Total dividends = 155,000

New England's cash balance at the end of the year is $208,000

Explanation:

The computation of the ending cash balance is shown below:

Ending cash balance = Net cash provided by operating activities + net cash used by investing activities + cash provided by financing activities + beginning cash balance

= $351,000 - $420,000 + $250,000 + $27,000

= $208,000

We assume the investing activity have made a purchase of fixed assets that's why we deduct it plus it show that the amount is used and the sale amount of land is already included in the investing activity so we do not consider it