On January 1, 20X7, Poke Corporation acquired 25 percent of the outstanding shares of Shove...
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On January 1, 20X7, Poke Corporation acquired 25 percent of the outstanding shares of Shove Corporation for $100,000 cash. Shove Company reported net income of $75,000 and paid dividends of $30,000 for both 20X7 and 20X8. The fair value of shares held by Poke was $110,000 and $105,000 on December 31, 20X7 and 20X8 respectively. If instead, Poke could not exercise significant influence over the investee, by what amount will Pokes 20X7 income increase due to its investment in Shove?
a) 11,250 b) 7,500 c) 17,500 d) 12,500
On January 1, 20X7, Poke Corporation acquired 25 percent of the outstanding shares of Shove Corporation for $100,000 cash. Shove Company reported net income of $75,000 and paid dividends of $30,000 for both 20X7 and 20X8. The fair value of shares held by Poke was $110,000 and $105,000 on December 31, 20X7 and 20X8 respectively. If instead, Poke could not exercise significant influence over the investee, by what amount will Pokes 20X7 income increase due to its investment in Shove?
a) 11,250 b) 7,500 c) 17,500 d) 12,500
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