Question

Jackson Moving & Storage Co. paid $120,000 for 25% of the common stock of
McDonough Co. at the beginning of the year. During the year, McDonough earned net
income of $50,000 and paid dividends of $20,000. The carrying value of Jackson’s investment in McDonough at the end of the year is
a. $150,000.
b. $170,000.
c. $120,000.
d. $127,500.

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