Business, 05.05.2020 02:45, abraham1366

Dodge, Incorporated acquires 15% of Gates Corporation on January 1, 2011, for $105,000 when the book value of Gates was $600,000. During 2011 Gates reported net income of $150,000 and paid dividends of $50,000. On January 1, 2012, Dodge purchased an additional 25% of Gates for $200,000. Any excess cost over book value is attributable to goodwill with an indefinite life. The fair-value method was used during 2011 but Dodge has deemed it necessary to change to the equity method after the second purchase. The income reported by Dodge for 2011 with regard to the Gates investment was :
A$7,500
B$22,500
C$15,000
D$100,000

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Dodge, Incorporated acquires 15% of Gates Corporation on January 1, 2011, for $105,000 when the book...