Madison corporation purchased 40% of jay corporation for $400,000 on january 1. on june 20 of the same year, jay corporation declared total cash dividends of $100,000. at year-end, jay corporation reported net income of $500,000. the balance in madison corporation's long-term investment-jay corporation account as of december 31 should be:
multiple choice
a. $640,000.
b. $240,000.
c. $740,000.
d. $400,000.
e. $560,000.
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Ответ:
E. $560,000
Explanation:
Balance of Long term Investment
= Value of Investment - Pre Acquisition Dividend ($100,000*40%) + Share of Net Income ($500,000*40%)
= $400,000 - $40,000 + $200,000
= $560,000
Therefore, The balance in Madison Corporation's Long-Term Investment-Jay Corporation account as of December 31 should be $560,000.
Ответ:
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