Multiple Choice
On January 1,2019,Palmer,Inc.bought 40% of the outstanding shares of Arnold Corporation at a cost of $137,000.Palmer uses the equity method of accounting for this investment.During 2019,Arnold Corporation reported $30,000 of net income and paid a total of $10,000 in cash dividends.At the end of 2019,the shares had a fair value of $150,000.
-At what amount should the Arnold investment be reported at on the December 31,2019 balance sheet of Palmer,Inc.?
A) $150,000.
B) $157,000.
C) $145,000.
D) $163,000.
Correct Answer:
Verified
Correct Answer:
Verified
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