On January 1, 2012, Teddy Bear Company purchased 25% of the common stock of one of its major suppliers-Fluff n' Stuff, for $1,000,000 cash. On November 1, 2012, Fluff n' Stuff declared and paid a cash dividend of $50,000. Further, for the year ended December 31, 2012, Fluff n' Stuff reported net income of $200,000.

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The Answer of On January 1, 2012, Teddy Bear Company purchased 25% of the common stock of one of its major suppliers-Fluff n' Stuff, for $1,000,000 cash. On November 1, 2012, Fluff n' Stuff declared and paid a cash dividend of $50,000. Further, for the year ended December 31, 2012, Fluff n' Stuff reported net income of $200,000.

On January 1, 2012, Teddy Bear Company Purchased 25% of the Common