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On January 2, 2020, Howdy Doody Corporation purchased 14% of Ranger Corporation's common stock for...

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Accounting

On January 2, 2020, Howdy Doody Corporation purchased 14% of Ranger Corporation's common stock for $59,000. Ranger's net income for the years ended December 31, 2020, and December 31, 2021, were $12,000 and $55,000, respectively. During 2020, Ranger declared and paid a dividend of $63,000. On December 31, 2020, the fair value of the Ranger stock owned by Howdy Doody had increased to $69,000. How much should Howdy Doody show in the 2020 income statement as income from this investment?

Multiple Choice

  • $16,000.

  • $8,820.

  • $10,000.

  • $18,820.

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