Question

Goldman Company reports net income of $140,000 each year and pays an annual cash dividend of $50,000. The company holds net assets of $1,200,000 on January 1, 2010. On that date, Wallace purchases 40 percent of the outstanding stock for $600,000, which gives it the ability to significantly influence Goldman. At the purchase date, the excess of Wallace’s cost over its proportionate share of Goldman’s book value was assigned to goodwill. On December 31, 2012, what is the Investment in Goldman Company balance (equity method) in Wallace’s financial records?
a. $600,000.
b. $660,000.
c. $690,000.
d. $708,000.



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  • CreatedOctober 04, 2014
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