Kim Company bought 30% of the shares of Phelps, Inc., at the start of 2021. Kim paid
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Kim Company bought 30% of the shares of Phelps, Inc., at the start of 2021. Kim paid $10 million for the shares. Thirty percent of the book value of Phelps’s net assets is $8 million, and the difference of $2 million is due to land that Phelps owns that has appreciated in value. During 2021, Phelps reported net income of $1 million and paid a cash dividend of $0.5 million. At what amount does Kim carry the Phelps investment on its balance sheet as of December 31, 2021?
Balance SheetBalance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
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