Assume that, on January 1, 2018, Matsui Co. paid $809,600 for its investment in 35,200 shares of Yankee Inc. Further, assume that Yankee has 160,000 total shares of stock issued. The book value and fair value of Yankee's identifiable net assets were both $320,000 at January 1, 2018. The following information pertains to Yankee during 2018: Net Income $ 160,000 Dividends declared and paid $ 48,000 Market price of common stock on 12/31/2018 $ 25 / share 1. What amount would Matsui report in its year-end 2018 balance sheet for its investment in Yankee?

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Business

Lilah Arias

26 September, 14:47

Assume that, on January 1, 2018, Matsui Co. paid $809,600 for its investment in 35,200 shares of Yankee Inc. Further, assume that Yankee has 160,000 total shares of stock issued. The book value and fair value of Yankee's identifiable net assets were both $320,000 at January 1, 2018. The following information pertains to Yankee during 2018: Net Income $ 160,000 Dividends declared and paid $ 48,000 Market price of common stock on 12/31/2018 $ 25 / share 1. What amount would Matsui report in its year-end 2018 balance sheet for its investment in Yankee?

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Joslyn · Answer 1

The amount that Matsui would report in its year-end 2018 balance sheet for its investment in Yankee is $804992.

Explanation:

Year end balance = Beginning balance + Net income - Dividend

= $809,600 + (35,200*36%) - ($ 48,000*36%)

= $809,600 + $12672 - $17280

= $804992

Therefore, The amount that Matsui would report in its year-end 2018 balance sheet for its investment in Yankee is $804992.