On January 1, 2017, Peach, Inc. purchased 40% of the common stock of Apple Company for $61,000. At the date of acquisition, the following information for Apple Company was available: All of Apple Company's other assets had book values equal to their fair values. In 2017, Apple earned $18,000 of net income and distributed $12,500 of dividends. How much investment income would Peach record in 2017?

Question

On January 1, 2017, Peach, Inc. purchased 40% of the common stock of Apple Company for $61,000. At the date of acquisition, the following information for Apple Company was available:  All of Apple Company's other assets had book values equal to their fair values. In 2017, Apple earned $18,000 of net income and distributed $12,500 of dividends. How much investment income would Peach record in 2017?

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The Answer of On January 1, 2017, Peach, Inc. purchased 40% of the common stock of Apple Company for $61,000. At the date of acquisition, the following information for Apple Company was available:  All of Apple Company's other assets had book values equal to their fair values. In 2017, Apple earned $18,000 of net income and distributed $12,500 of dividends. How much investment income would Peach record in 2017?