On January 1, 2018, Nana Company paid $100,000 for 8,000 shares of Papa Company common stock. The ownership in Papa Company is 10%. Nana Company does not have significant influence over Papa Company. Papa reported net income of $52,000 for the year ended December 31, 2018. The fair value of the Papa stock on that date was $45 per share. What amount will be reported in the balance sheet of Nana Company for the investment in Papa at December 31, 2018?

Question

Quizplus · Accepted Answer

8,000 × $45 = $360,000
Equity securities with readily determinable fair value, and for which there is not significant influence over the investee company, are reported at fair value.

On January 1, 2018, Nana Company Paid $100,000 for 8,000