On October 1, 2016, White Company declared a property dividend payable in the form of marketable equity
Question:
On October 1, 2016, White Company declared a property dividend payable in the form of marketable equity securities classified as "available for sale" for financial accounting purposes. The marketable equity securities will be distributed to the common stockholders on December 1, 2016. The investment in equity securities originally cost White $510,000 on August 1, 2016. The investment's fair value on various dates is as follows:
October 1, 2016 $530,000
December 1, 2016 535,000
December 31, 2016 540,00
The amount credited to Gain on Disposal of Investments resulting from this dividend transaction should be
a. $20,000
b. 0
c. 25,000
d. 30,000
Accounting Tools for Business Decision Making
ISBN: 978-1118096895
6th edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso