Examlex

Solved

Gilman Company Purchased 100,000 of the 250,000 Shares of Common

question 47

Multiple Choice

Gilman Company purchased 100,000 of the 250,000 shares of common stock of Burke Corporation on January 1, 2014, at $40 per share as a long-term investment. The records of Burke Corporation showed the following on December 31, 2014:  net income $575,000 Dividends declared and paid during December, 2014  Market price per share $30,000\begin{array}{lr} \text { net income } & \$ 575,000 \\\text { Dividends declared and paid during December, 2014 } \\\text { Market price per share } & \$ 30,000\end{array} How much should Gilman Company report as investment income from the Burke investment during 2014?


Definitions:

Equity Capital

Equity capital is the amount of money that is invested in a company by its owners, in exchange for ownership interest or shares.

Crowdfunding

The method of financing a project or business through the collection of minor contributions from a wide base of individuals, mainly through online platforms.

SEC

The Securities and Exchange Commission (SEC) is a U.S. federal agency that oversees and regulates the securities market, protecting investors, maintaining fair, orderly, and efficient markets.

Brick-and-Mortar

Refers to businesses that have physical stores or offices in buildings, as opposed to or in addition to, online or virtual presence.

Related Questions