On January 1 of the Current Year, Beta Company Paid

question 159

Multiple Choice

On January 1 of the current year, Beta Company paid $200,000 for 10,000 shares of Gamma Company common stock. Beta owns 10% of Gamma Company. Gamma reported net income of $66,000 for December 31 of the current year. The fair value of the Gamma stock on that date was $27. What amount will be reported in Beta's balance sheet for the investment in Gamma at December 31?

• A) $204,000
• B) $266,000
• C) $270,000
• D) $336,000

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Definitions:

Expensive

Referring to something that has a high cost or price associated with its acquisition, upkeep, or use.

Educates People

The process of providing knowledge, skills, and information to individuals, typically through structured learning environments.

Provides Jobs

The creation or provision of employment opportunities for individuals within a community or economy.

Strong Incentives

Powerful motivators or rewards designed to influence the actions and behaviors of individuals or organizations towards specific outcomes.