Question: Problem One [B] Parent Co. invested $5,000,000 in Sub Co. for 30% of its outstanding stock. At the time of the purchase, Sub Co. had
Problem One [B] Parent Co. invested $5,000,000 in Sub Co. for 30% of its outstanding stock. At the time of the purchase, Sub Co. had a book value of $15,000,000. Sub Co. pays out 75% of net income in dividends each year. Use the information in the following T-account for the investment in Sub Co. to answer the questions that follow. (a) How much was Parent Co.'s share of Sub Co.'s net income for the year? (b) What was Sub Co.'s total net income for the year? (c) What was Sub Co.'s total dividends for the year? (d) How much was Parent Co.'s share of Sub Co.'s dividends for the year
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