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.

Question

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.

Quizplus · Accepted Answer

The Answer of 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.