_____ Paxco owns 80% of the outstanding common stock of Saxco. These holdings were acquired in a single block purchase in 2002. On, 4/1/06 Paxco sold 25% of its holdings in Saxco for $84,000. At 12/31/03, the carrying value of Paxco's investment in Saxco was $320,000. During the first quarter of 2006, Saxco reported net income of $80,000 and declared dividends of $30,000. Paxco uses the equity method. In Paxco's 2006 income statement, it should report a:
A) Gain of $4,000.
B) Gain of $10,000.
C) Loss of $6,000.
D) Loss of $12,000.
E) None of the above.

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The Answer of _____ Paxco owns 80% of the outstanding common stock of Saxco. These holdings were acquired in a single block purchase in 2002. On, 4/1/06 Paxco sold 25% of its holdings in Saxco for $84,000. At 12/31/03, the carrying value of Paxco's investment in Saxco was $320,000. During the first quarter of 2006, Saxco reported net income of $80,000 and declared dividends of $30,000. Paxco uses the equity method. In Paxco's 2006 income statement, it should report a:
A) Gain of $4,000.
B) Gain of $10,000.
C) Loss of $6,000.
D) Loss of $12,000.
E) None of the above.

_____ Paxco Owns 80% of the Outstanding Common Stock of Saxco