Point Co. purchased 90% of Sharpe Corp.\'s voting stock on January 1, 20X2 for $

Question

           Point Co. purchased 90% of Sharpe Corp.'s voting stock on January 1, 20X2 for $5,580,000. Prior to the acquisition, Point held a 10% equity position in Sharpe Company. On January 1, 20X2 Point's 10% investment in Sharpe has a book value of $340,000 and a fair value of $620,000. On January 1, 20X2 Point records the following:                                                      

     Debit Gain on revaluation of Sharpe's stock $280,000
      Credit Gain on revaluation of Sharpe's stock $280,000
      Credit Investment in Sharpe stock $5,860,000
      Debit Investment in Sharpe stock $6,200,000

Explanation / Answer

   Credit Gain on revaluation of Sharpe's stock $280,000

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