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Test Bank for Fundamentals of Advanced Accounting, 9th Edition by Joe Ben Hoyle

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Test Bank for Fundamentals of Advanced Accounting 9e 9th Edition by Joe Ben Hoyle, Thomas Schaefer and Timothy Doupnik. ISBN 0447 Full Chapters test bank included Chapter 1: The Equity Method of Accounting for Investments Chapter 2: Consolidation of Financial Information Chapter ...

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  • June 20, 2023
  • 707
  • 2022/2023
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Chapter 01 9e Hoyle
1) Baker Company owns 15% of the common stock of Charlie Corporation and used the fair-
value method to account for this investment. Charlie reported net income of $120,000 for
2024 and paid dividends of $70,000 on October 1, 2024. How much income should Baker
recognize on this investment in 2024?
A) $18,000
B) $10,500
C) $28,500
D) $7,500
E) $50,000



2) Loeffler Company owns 35% of the common stock of Tetter Company and uses the equity
method to account for the investment. During 2024, Tetter reported income of $260,000 and
paid dividends of $90,000. There is no amortization associated with the investment. During
2024, how much income should Loeffler recognize related to this investment?
A) $90,000
B) $91,000
C) $122,500
D) $31,500
E) $59,500



3) On January 1, 2024, Lee Company paid $1,870,000 for 80,000 shares of Thomas Company’s
voting common stock which represents a 45% investment. No allocation to goodwill or other
specific account was necessary. Significant influence over Thomas was achieved by this
acquisition. Thomas distributed a dividend of $2.00 per share during 2024 and reported net
income of $720,000. What was the balance in the Investment in Thomas Company account
found in the financial records of Lee as of December 31, 2024?
A) $2,114,000.
B) $2,194,000
C) $2,354,000
D) $2,158,000
E) $2,034,000




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