Question

Baldwin Corporation purchased 25 percent of Gwin Company’s common stock on January 1, 20X8, at underlying book value. In 20X8, Gwin reported a net loss of $20,000 and paid dividends of $10,000, and in 20X9, The company reported net income of $68,000 and paid dividends of $16,000. Gwin also purchased marketable securities classified as available-for-sale on February 8, 20X9, and reported an increase of $12,000 in their fair value at December 31, 20X9. Baldwin reported a balance of $67,000 in its investment in Gwin at December 31, 20X9.

Required
Compute the amount paid by Baldwin Corporation to purchase the shares of Gwin Company.



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  • CreatedMay 23, 2014
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