On January 1,2012,Pine Corporation purchased 24,000 of the 30,000 outstanding common shares of Summit Company for $1,140,000.On January 1,2016,Pine Corporation sold 3,000 of its shares of Summit Company on the open market for $90 per share.Summit Company's stockholders' equity on January 1,2012,and January 1,2016,was as follows: The difference between implied and book value is assigned to Summit Company's land.As a result of the sale,Pine Corporation's Investment in Summit account should be credited for:
A)$165,000.
B)$206,250.
C)$120,000.
D)$142,500.

Question

On January 1,2012,Pine Corporation purchased 24,000 of the 30,000 outstanding common shares of Summit Company for $1,140,000.On January 1,2016,Pine Corporation sold 3,000 of its shares of Summit Company on the open market for $90 per share.Summit Company's stockholders' equity on January 1,2012,and January 1,2016,was as follows:  The difference between implied and book value is assigned to Summit Company's land.As a result of the sale,Pine Corporation's Investment in Summit account should be credited for:
A)$165,000. 
B)$206,250. 
C)$120,000. 
D)$142,500.

Quizplus · Accepted Answer

The Answer is D

On January 1,2012,Pine Corporation Purchased 24,000 of the 30,000 Outstanding