Question

On January 1, 2021, Bronson Co., a calendar-year entity, acquired 40% of Corbin Corp.’s common stock...

On January 1, 2021, Bronson Co., a calendar-year entity, acquired 40% of Corbin Corp.’s common stock for $1 million. It did not elect the fair value option for the investment. The purchase price was equal to the carrying amount of 40% of Corbin's net assets, which approximated their fair value. Corbin's earnings and cash dividend payments for 2021 and 2022 were as follows:

2021

2022

Earnings

$300,000

$400,000

Dividends

$90,000

$120,000

On December 31, 2022, the balance in the investment account reported by Bronson should be

Group of answer choices

A. $1,196,000

B. $1,280,000

C. $1,364,000

D. $1,490,000

Business   Accounting   
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Homework Answers

Answer #1

Correct Answer will be $1196000

Detial working for your easy refrence

Computation of balance of Investment Account'
Investment made in Corbin   $1,000,000.00
Share in Earning of Corbin Company
2021 ( 300000*40%) $120,000.00
2022 (400000*40%) $160,000.00
Less: Share in Dividend  
2021 (90000*40%) -$36,000.00
2022 (120000*40%) -$48,000.00
Balance in investment Account $1,196,000.00
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