Tamarisk Co. invested $970,000 in Vaughn Co. for 25% of its outstanding stock. Vaughn Co. pays out 40% of net income in dividends each year.

Use the information in the below T-account for the investment in Vaughn to answer the below questions.

Investment in Vaughn Co.
970,000
102,000
	40,800

(a) How much was Tamarisk Co.’s share of Vaughn Co.’s net income for the year?

(b) What was Vaughn Co.’s total net income for the year?

(c) What was Vaughn Co.’s total dividends for the year?

(d) How much was Tamarisk Co.’s share of Vaughn Co.’s dividends for the year?

Answer rating: 100% (QA)

a Tamarisk Cos share of Vaughn Cos net income for the year can be calculated as follows Net income before dividends 102000 Dividends paid 40 x Net inc... View the full answer