On January 1, 2021, Lee Company Paid $1,870,000 for 80,000

question 62

Multiple Choice

On January 1, 2021, Lee Company paid $1,870,000 for 80,000 shares of Thomas Co.'s voting common stock which represents a 45% investment. No allocation to goodwill or other specific account was necessary. Significant influence over Thomas was achieved by this acquisition. Thomas distributed a dividend of $2.00 per share during 2021 and reported net income of $720,000. What was the balance in the Investment in Thomas Co. account found in the financial records of Lee as of December 31, 2021?

• A) $2,114,000.
• B) $2,194,000.
• C) $2,354,000.
• D) $2,158,000.
• E) $2,034,000.

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Definitions:

Annual Incomes

The total earned income over one year before taxes for an individual or household.

Doctors

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Light, crispy biscuits often eaten between meals or used as appetizers that can come in various flavors.

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