Gator Co. invested $1,180,000 in Demo Co. for 25% of its outstanding stock. Demo

Question

  Gator Co. invested $1,180,000 in Demo Co. for 25% of its outstanding stock. Demo Co. pays out 40% of net income in   dividends each year.    

  Use the information in the following T-account for the investment in Demo to answer the following questions.   

Investment in Demo Co.

Investment in Demo Co.

1,180,000    140,000       56,000 Gator Co. invested $1,180,000 in Demo Co. for 25% of its outstanding stock. Demo Co. pays out 40% of net income in dividends each year. Use the information in the following T-account for the investment in Demo to answer the following questions.

Explanation / Answer

a. $140,000

b.$56,000

c.Demo Co.'s total net income for the year =$140,000/25%=$560,000

d.Demo Co.'s total dividends for the year =$56,000/25%=$224,000

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.