On January 1, 2020, Barber Corp. paid $1,160,000 to acquire Thompson Co. Thompson maintained separate incorporation. Barber used the equity method to account for the investment. The following information is available for Thompson's assets, liabilities, and stockholders' equity accounts on January 1, 2020: Thompson earned net income for 2020 of $134,000 and paid dividends of $51,000 during the year.What is the balance in Barber's investment in subsidiary account at the end of 2020?
A) $1,211,000.
B) $1,242,100.
C) $1,243,000.
D) $1,243,900.
E) $1,294,000.

Question

On January 1, 2020, Barber Corp. paid $1,160,000 to acquire Thompson Co. Thompson maintained separate incorporation. Barber used the equity method to account for the investment. The following information is available for Thompson's assets, liabilities, and stockholders' equity accounts on January 1, 2020:  Thompson earned net income for 2020 of $134,000 and paid dividends of $51,000 during the year.What is the balance in Barber's investment in subsidiary account at the end of 2020?
A) $1,211,000. 
B) $1,242,100. 
C) $1,243,000. 
D) $1,243,900. 
E) $1,294,000.

Quizplus · Accepted Answer

The Answer is D