ACCT

$450$ Midterm Study Guide

Granada co$.$ Purchase $30\%$ of chatsworth Inc's voting stock for $$200,000$ on January $2,$ Year $1.$ Granada's $30\%$ interest in Chatsworth gove Granada the ability to excercise significant influence over chatsworth operating and Financial policies and Granada used the equity method for its $30\%$ investment in chats worth. During Year $1.$ chats worth earned $$80,000$ and paid dividends of $$50,000.$ Chatswort reported earnings of $$100,000$ for the six months ended June $30,$ year $2,$ and $$200,000$ for the year ended December $31,$ Year $2.$ On July $1$ year $2,$ Granada sold half of it s stock in chatsworth for $$150,000$ cast chatsworth paid dividends of $$60,000$ on October $1,$ year $2.$ In its year $2$ income statement, what amount should Granada report as gain from the sale of half of its investment?