20. On January 2 2015, Howdy Doody Corporation purchased 16% of Ranger Corporati

Question

20. On January 2 2015, Howdy Doody Corporation purchased 16% of Ranger Corporation's corn on stock for $50,000 and classifled the Investment as avallable for sale. Ranger's net Income for the years ended December 31,2015 and 2016, were $15,000 and $54,000, respectively. During 2016, Ranger declared 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 In the 2016 income statement as Income from this investment? $10,880. O $29,000. O $33.880 O $23.000. acBook Ai esc FI F3 FS F6 2

Explanation / Answer

since the shares owned are 16% so the dividend income that will be shoen in income statement will be 68000*.16=10880

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