20. On January 2, 2015, Howdy Doody Corporation purchased 16% or Ranger Corporat

Question

20. On January 2, 2015, Howdy Doody Corporation purchased 16% or Ranger Corporation's common stock for $50,000 and classifled the Investment as available for sale. Rangers net income for the years ended December 31,2015 and 2016, were $15,000 and $54,000, respectively. During 2016, Ranger declared and paid a dividend of $68,000. There were no dividends in 2015. On December 31, 2015, the fair value of the Ranger stock owned by Howdy Doody had increased to $73,000. How much should Howdy Doody show n the 2016 Income statement as Income from this investment? O $10,880. O $29.000 O $33,880 O $23,000. cBook Air esc 20 OOD F FS F6 2 8 4

Explanation / Answer

Investment revenue = 68000*16%= 10880 Option 1 is correct

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