Strickland Industries purchased a 30% interest in Spartan, Inc. for P600,000. Spartan, Inc. has 100,000 P10 par value ordinary shares outstanding. This investment enables Strickland to exert significant influence over Spartan. During the year, Spartan earned net income of P360,000 and paid dividends of P120,000; Strickland earned net income of P48,000 and paid dividends of P160,000. At the end of the year, the shares of Spartan were trading on an organized exchange for P22 per share. On Strickland’s year-end statement of financial position, its investment in Spartan, Inc. will be valued at P600,000 P660,000 P672,000 P696,000
Strickland Industries purchased a 30% interest in Spartan, Inc. for P600,000. Spartan, Inc. has 100,000 P10 par value ordinary shares outstanding. This investment enables Strickland to exert significant influence over Spartan. During the year, Spartan earned net income of P360,000 and paid dividends of P120,000; Strickland earned net income of P48,000 and paid dividends of P160,000. At the end of the year, the shares of Spartan were trading on an organized exchange for P22 per share. On Strickland’s year-end statement of financial position, its investment in Spartan, Inc. will be valued at P600,000 P660,000 P672,000 P696,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 1MC
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Strickland Industries purchased a 30% interest in Spartan, Inc. for P600,000. Spartan, Inc. has 100,000 P10 par value ordinary shares outstanding. This investment enables Strickland to exert significant influence over Spartan. During the year, Spartan earned net income of P360,000 and paid dividends of P120,000; Strickland earned net income of P48,000 and paid dividends of P160,000. At the end of the year, the shares of Spartan were trading on an organized exchange for P22 per share. On Strickland’s year-end
P600,000
P660,000
P672,000
P696,000
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