On January $1,$ year $1,$ firm ABC bought $25\%$ of the outstanding common stock of FXC for $$304,000$ cash. At the date of acquisition of the stock, FXC$\text{'}$s net assets had a fair value of $$920,000.$ Their book value was $$820,000.$ The difference was attributable equally to the buildings and its land exceeding book value. FXC$\text{'}$s net income for the year ended December $31,$ year $1,$ was $$152,000.$ During year $1,$ FXC paid dividend of $$31,000.$ The buildings have a remaining life of $10$ years.

Required: What does ABC record as investment revenue in FXC in year $1?$

Answer rating: 100% (QA)

Calculate ABCs Share of FXCs Net Income Calculate FXCs net income for the year 152000 Calculate AB... View the full answer