On January 1, 2010, Cale Corp. paid $1,020,000 to acquire Kaltop Co. Kaltop maintained separate incorporation. Cale used the equity method to account for the investment. The following information is available for Kaltop's assets, liabilities, and stockholders' equity accounts:

Kaltop earned net income for 2010 of $126,000 and paid dividends of $48,000 during the year.
What is the balance in Cale's investment in subsidiary account at the end of 2010?

A) $1,099,000.
B) $1,020,000.
C) $1,096,200.
D) $1,098,000.
E) $1,144,400.

Question

On January 1, 2010, Cale Corp. paid $1,020,000 to acquire Kaltop Co. Kaltop maintained separate incorporation. Cale used the equity method to account for the investment. The following information is available for Kaltop's assets, liabilities, and stockholders' equity accounts:

Kaltop earned net income for 2010 of $126,000 and paid dividends of $48,000 during the year.
What is the balance in Cale's investment in subsidiary account at the end of 2010?

A) $1,099,000. 
B) $1,020,000. 
C) $1,096,200. 
D) $1,098,000. 
E) $1,144,400.

Quizplus · Accepted Answer

The Answer of On January 1, 2010, Cale Corp. paid $1,020,000 to acquire Kaltop Co. Kaltop maintained separate incorporation. Cale used the equity method to account for the investment. The following information is available for Kaltop's assets, liabilities, and stockholders' equity accounts:

Kaltop earned net income for 2010 of $126,000 and paid dividends of $48,000 during the year.
What is the balance in Cale's investment in subsidiary account at the end of 2010?

A) $1,099,000. 
B) $1,020,000. 
C) $1,096,200. 
D) $1,098,000. 
E) $1,144,400.