On January 1, 2011, Capitech Corporation Acquired Logirun, Inc

question 60

Multiple Choice

On January 1, 2011, Capitech Corporation acquired Logirun, Inc. as a long-term investment for $250,000 (a 30 percent common stock interest in Logirun) . On that date, Logirun had net assets with a book value and current market value of $800,000. During 2011, Logirun reported net income of $90,000 and declared and paid cash dividends of $20,000. What is the maximum amount of income that Capitech should report from this investment for 2011?

• A) $6,000
• B) $21,000
• C) $27,000
• D) $33,000

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