Business, 16.04.2020 01:31 andrejr0330jr
Atlarge Inc. owns 30% of the outstanding voting common stock of Ticker Co. and has the ability to significantly influence the investee’s operations and decision-making. On January 1, 2018, the balance in the Investment in Ticker Co. account was $402,000. Amortization associated with the purchase of this investment is $8,000 per year. During 2018, Ticker earned income of $108,000 and paid cash dividends of $36,000. Previously in 2017, Ticker had sold inventory costing $28,800 to Atlarge for $48,000. All but 25% of this merchandise was consumed by Atlarge during 2017. The remainder was used during the first few weeks of 2018. Additional sales were made to Atlarge in 2018; inventory costing $33,600 was transferred at a price of $60,000. Of this total, 40% was not consumed until 2019.What amount of equity income would Atlarge have recognized in 2018 from its ownership
interest in Ticker?
A. $19,792.
B. $27,640.
C. $22,672.
D. $24,400.
E. $21,748.
What was the balance in the Investment in Ticker Co. account at the end of 2018?
A. $401,136.
B. $413,872.
C. $418,840.
D. $412,432.
E. $410,148.
Answers: 1
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Atlarge Inc. owns 30% of the outstanding voting common stock of Ticker Co. and has the ability to si...
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