On January 3, 2020, Baxter, Inc

question 76

Multiple Choice

On January 3, 2020, Baxter, Inc. acquired 40% of the outstanding common stock of Anchor Co. for $2,800,000. This investment gave Baxter the ability to exercise significant influence over Anchor. Anchor's assets on that date were recorded at $11,700,000 with liabilities of $4,700,000. There were no other differences between book and fair values.During 2020, Anchor reported net income of $600,000. For 2021, Anchor reported net income of $900,000. Dividends of $350,000 were paid in each of these two years.What was the reported balance of Baxter's Investment in Anchor Co. at December 31, 2020?

• A) $2,420,000.
• B) $2,800,000.
• C) $2,900,000.
• D) $3,040,000.
• E) $3,180,000.

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Definitions:

X-rays

Electromagnetic radiation used in medical imaging to generate images of the inside of the body.

Arthrogram

A diagnostic imaging procedure used to visualize internal structures of a joint, typically using X-ray in conjunction with a contrast agent.

Contrast Medium

A substance used in medical imaging to improve the visibility of internal structures in radiographic images.

General Anesthesia

A medically induced state of unconsciousness, accompanied by a lack of sensation and pain, used during surgical procedures.