Gilman Company purchased 100,000 of the 250,000 shares of common stock of Burke

Question

Gilman Company purchased 100,000 of the 250,000 shares of common stock of Burke Corporation on January 1, 2009, at $40 per share as a long-term investment. The records of Burke Corporation showed the following on December 31, 2009: Net income $575,000 Dividends declared and paid during December, 2009 $30,000 Market price per share $38 Gilman Company should report the following on the December 31, 2009, balance sheet for its investment in Burke Corporation. A. $4,218,000 B. $4,000,000 C. $4,124,000 D. $3,800,000

Explanation / Answer

D)$3,800,000

100,000 x $38 = $3,800,000

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