On January 3, 2020, Baxter, Inc. acquired 40% of the outstanding common stock of Anchor Co. for
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On January 3, 2020, Baxter, Inc. acquired 40% of the outstanding common stock of Anchor Co. for $2,800,000. This investment gave Baxter the ability to exercise significant influence over Anchor. Anchor’s assets on that date were recorded at $11,700,000 with liabilities of $4,700,000. There were no other differences between book and fair values.
During 2020, Anchor reported net income of $600,000. For 2021, Anchor reported net income of $900,000. Dividends of $350,000 were paid in each of these two years.
How much income did Baxter report from Anchor for 2020?
Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
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