aye Co. owned 20% of Pen Inc.'s preference share capital and 50% of the ordinary share capital. Pen Inc.'s share capital outstanding comprised the following at year-end: 10% cumulative preference share capital - 2,000,000 Ordinary share capital - 7,000,000 Pen Inc. reported net income of $5,000,000 for the current year. Assuming that the preference share capital of Pen Inc. are non-cumulative and that Pen Inc. paid 1,000,000 cash dividends for the current year. What amount is the balance of Investment in Pen Inc. at the end of the end of the current year?

aye Co. owned 20% of Pen Inc.'s preference share capital and 50% of the ordinary share capital. Pen Inc.'s share capital outstanding comprised the following at year-end: 10% cumulative preference share capital - 2,000,000 Ordinary share capital - 7,000,000 Pen Inc. reported net income of $5,000,000 for the current year. Assuming that the preference share capital of Pen Inc. are non-cumulative and that Pen Inc. paid 1,000,000 cash dividends for the current year. What amount is the balance of Investment in Pen Inc. at the end of the end of the current year?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter15: Choice Of Business Entity—other Considerations

Section: Chapter Questions

Problem 80P

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Faye Co. owned 20% of Pen Inc.'s preference share capital and 50% of the ordinary share capital. Pen Inc.'s share capital outstanding comprised the following at year-end:10% cumulative preference share capital - 2,000,000Ordinary share capital - 7,000,000Pen Inc. reported net income of $5,000,000 for the current year.What amount is the balance of Investment in Pen Inc. at the end of the current year?
Faye Co. owned 20% of Pen Inc.'s preference share capital and 50% of the ordinary share capital. Pen Inc.'s share capital outstanding comprised the following at year-end:10% cumulative preference share capital - 2,000,000Ordinary share capital - 7,000,000Pen Inc. reported net income of $5,000,000 for the current year.Assuming that the preference share capital of Pen Inc. are non-cumulative, how much should be recorded as investment income for the current year?
Faye Co. owned 20% of Pen Inc.'s preference share capital and 50% of the ordinary share capital. Pen Inc.'s share capital outstanding comprised the following at year-end:10% cumulative preference share capital - 2,000,000Ordinary share capital - 7,000,000Pen Inc. reported net income of $5,000,000 for the current year.Assuming that the preference share capital of Pen Inc. are non-cumulative and that Pen Inc. paid 1,000,000 cash dividends for the current year, how much should be recorded as investment income for the current year?
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