On January 1, 2014, Garner Corporation Purchased 30% of the Ordinary

question 151

Multiple Choice

On January 1, 2014, Garner Corporation purchased 30% of the ordinary shares outstanding of Landon Corporation for $200,000. During 2014, Landon Corporation reported net income of $80,000 and paid cash dividends of $40,000. The balance of the Share Investments-Landon account on the books of Garner Corporation at December 31, 2014 is

• A) $200,000.
• B) $240,000.
• C) $280,000.
• D) $212,000.

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Definitions:

Subscription Price

The price at which existing shareholders can purchase additional shares of stock before it is offered to the public.

Subscription Price

The price at which existing shareholders are allowed to buy additional shares in a rights issue, usually at a discount to the current market price.

Common Share Price

The market value of a single share of a company's common stock, fluctuating based on buying and selling activities.

Rights-On Period

A designated timeframe during which shareholders have the right to purchase additional shares at a predetermined price before the offering is open to the public.