Bharrat Corporation Purchased 40% of Ferris Corporation for $100,000 on January

question 166

Multiple Choice

Bharrat Corporation purchased 40% of Ferris Corporation for $100,000 on January 1.On October 17 of the same year,Ferris Corporation declared total cash dividends of $12,000.At year-end,Ferris Corporation reported net income of $60,000.The balance in the Bharrat Corporation's Long-Term Investment-Ferris account at December 31 should be:

• A)$80,800.
• B)$100,000.
• C)$95,200.
• D)$119,200.
• E)$124,000.

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Definitions:

Sole Stockholder

An individual or entity that owns 100% of a corporation’s stock, holding complete control over the firm.

Money Units

A standard unit of measure for accounting transactions, typically representing the currency in which a financial transaction is recorded.

Transactions

Financial activities or events that affect the financial position of a business, such as sales and purchases.

Accounting Equation

The foundational principle in accounting that equates assets with the sum of liabilities and owner's equity: Assets = Liabilities + Equity.