Pacific Company bought 35% of the outstanding common stock of Atlantic Inc. on January 1, 2014, for $400,000. Atlantic reported net income of $200,000 for 2014 and declared and paid no dividends for the year. This investment was sold for $500,000 on December 31, 2014.
Pacific should report a gain on sale of this investment on its 2014 income statement of _____.
Gain or loss from sale of Investment will be closed income statement if the investment is a trading security. Other securities is closed to other comprehensive income.
Answer and Explanation:
Pacific should report a gain on sale of this investment on its 2014 income statement of $30,000
|Value of Investment using equity method||470,000|
|Gain on sale||30,000|
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from Finance 305: Risk ManagementChapter 3 / Lesson 3