Excellence Auto Inc. (EAI) has 150,000 shares issued in total. Assume that on January 1, 2021, Power One Corporation acquired 15% of EAI's shares for $45 per share. Power One is assumed not to have significant influence over EAI and will use the cost method to account for its investments. For the year ended December 31, 2021, EAI reported profit of $800,000 and declared and paid $80,000 cash dividends. At December 31, 2021, EAI's common shares were traded at $50 each. How much is Power One required to record in its dividend revenue account in EAI? O $132,000 O $120,000 O $12,000 O $80,000
Excellence Auto Inc. (EAI) has 150,000 shares issued in total. Assume that on January 1, 2021, Power One Corporation acquired 15% of EAI's shares for $45 per share. Power One is assumed not to have significant influence over EAI and will use the cost method to account for its investments. For the year ended December 31, 2021, EAI reported profit of $800,000 and declared and paid $80,000 cash dividends. At December 31, 2021, EAI's common shares were traded at $50 each. How much is Power One required to record in its dividend revenue account in EAI? O $132,000 O $120,000 O $12,000 O $80,000
Chapter11: The Corporate Income Tax
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Problem 5P: Fisafolia Corporation has gross income from operations of $210,000 and operating expenses of...
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Transcribed Image Text:Excellence Auto Inc. (EAI) has 150,000 shares issued in total. Assume that on January 1, 2021, Power One Corporation acquired 15%
of EAI's shares for $45 per share. Power One is assumed not to have significant influence over EAI and will use the cost method to
account for its investments. For the year ended December 31, 2021, EAI reported profit of $800,000 and declared and paid $80,000
cash dividends. At December 31, 2021, EAI's common shares were traded at $50 each. How much is Power One required to record in
its dividend revenue account in EAI?
$132,000
$120,000
$12,000
$80,000
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