Use the following information to answer the question(s)below.
On January 1,2011,Pardy Corporation acquired a 70% interest in the common stock of Salter Corporation for $7,000,000 when Salter's stockholders' equity was as follows:
There were no preferred dividends in arrears on January 1,2011.There are no book value/fair value differentials.
-Salter has a 2011 net loss of $200,000.No dividends are declared or paid in 2011.What is the change in Pardy's Investment in Salter for the year ending December 31,2011?

Question

Use the following information to answer the question(s)below.
On January 1,2011,Pardy Corporation acquired a 70% interest in the common stock of Salter Corporation for $7,000,000 when Salter's stockholders' equity was as follows:
  There were no preferred dividends in arrears on January 1,2011.There are no book value/fair value differentials.
-Salter has a 2011 net loss of $200,000.No dividends are declared or paid in 2011.What is the change in Pardy's Investment in Salter for the year ending December 31,2011?

Quizplus · Accepted Answer

D)
Salter's net loss $(200,000)
Preferred dividend 10% × $1,000,000 (100,000)
Total Loss to common stockholders (300,000)
Pardy's ownership percentage 70%
Pardy's share of the loss on investment $(210,000)

Use the Following Information to Answer the Question(s)below