The Mason Company acquired a 30% interest in the Dixon Company on January 2, 2010, for $1, 000, 000.Mason Company recorded $80, 000 of purchased goodwill on the transaction.During 2010, Dixon Company paid $100, 000 in dividends and reported net income of $170, 000.At the end of 2010, the balance in Investment in Dixon Company should be

Question

Quizplus · Accepted Answer

The initial investment of $1,000,000 plus 30% share of the net income of $170,000 (which amounts to $51,000) less the 30% of dividends paid ($30,000) plus the purchased goodwill of $80,000 gives a total balance of Investment in Dixon Company of $1,021,000 at the end of 2010.

The Mason Company Acquired a 30% Interest in the Dixon