On January 2, Year 1, Saxe Company purchased 20% of Lex Corporation's common stock for $150,000. Saxe
Fantastic news! We've Found the answer you've been seeking!
Question:
On January 2, Year 1, Saxe Company purchased 20% of Lex Corporation's common stock for $150,000. Saxe Corporation intends to hold the stock indefinitely. This investment did not give Saxe the ability to exercise significant influence over Lex. During Year 1 Lex reported net income of $175,000 and paid cash dividends of $100,000 on its common stock. There was no change in the fair value of the common stock during the Year. The balance in Saxe's investment in Lex Corporation account at December 31, Year 1, should be
a) $130,000.
b) $150,000.
c) $165,000.
d) $185,000.
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
Posted Date: