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UPLO Odve W On January 1, 2013, Pacer Company paid $2,020,000 for 60,000 shares of...

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Accounting

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UPLO Odve W On January 1, 2013, Pacer Company paid $2,020,000 for 60,000 shares of Lennon Co.'s voting common stock which represents a 35% investment. No allocation to goodwill or other specific account was made. Significant influence over Lennon was achieved by this acquisition. Lennon distributed a dividend of $3.00 per share during 2013 and reported net income of $820,000. What was the balance in the Investment in Lennon Co. account found in the financial records of Pacer as of December 31, 2013? A. $2,207,000. B. $2,027,000. C. $2,702,000. D. $2,127,000. E. $1,920,000. QUESTION 4 6 points Save Answer Direct combination costs (e.g. accounting) and stock issuance costs are often incurred in the process of making a controlling investment in another company. How should those costs be accounted for? Direct Combination Costs Stock Issuance Costs A. Increase expenses, Decrease paid-in capital B. Increase investment, Decrease Investment C. Increase investment, Increase expenses D. Increase expenses, Decrease investment E. Decrease paid-in capital, Increase investment QUESTION 5 6 points Save Answer Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Close Window Save and Submit

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