Use the Following Information for Questions

question 70

Multiple Choice

Use the following information for questions
Altadore Ltd.acquired 30% of Dorset Corp.'s common shares on January 1, 2011 for $240,000.During 2011, Dorset earned $100,000 and paid dividends of $60,000.Altadore's 30% interest in Dorset gives Altadore the ability to exercise significant influence over Dorset 's operating and financial policies.During 2012, Dorset earned $120,000 and paid dividends of $40,000 on April 1 and $40,000 on October 1.On July 1, 2012, Altadore sold half of its shares in Dorset for
$158,000 cash.
-What should be the gain on sale of this investment in Altadore's 2012 income statement?

• A)$38,000.
• B)$35,000.
• C)$23,000.
• D)$29,000.

---

Definitions:

Balance Sheet

A financial statement that presents a snapshot of a company's financial position, including assets, liabilities, and shareholders' equity at a specific point in time.

Construct

In a financial or accounting context, "construct" could refer to the process of building or developing financial models, budgets, or forecasts.

Warehouse

A large building where goods are stored before they are distributed to stores or consumers.

Journalize

The act of documenting transactions within a corporation's journal, which is a step in the accounting cycle.