Use the Following Information to Solve the Following Questions

question 32

Multiple Choice

Use the following information to solve the following questions:
On January 1, 2020, Abalone Ltd. acquired 30% of Flounder Corp.'s common shares for $ 240,000. During 2020, Flounder reported net income of $ 100,000 and paid total dividends of $ 60,000. Abalone's 30% interest in Flounder gives Abalone the ability to exercise significant influence over their operating and financial policies. During 2021, Flounder reported net income of $ 150,000 and paid total dividends of $ 30,000 on April 1 and $ 40,000 on October 1. On July 1, 2021, Abalone sold half of its shares in Flounder for $ 158,000 cash.
-The carrying amount of this investment in Abalone's December 31, 2020, statement of financial position should be

• A) $ 252,000.
• B) $ 240,000.
• C) $ 270,000.
• D) $ 275,000.

---

Definitions:

Tax Expense

The total amount of taxes a company is obligated to pay to various governmental authorities, reflected in its financial statements.

Interim Reporting

The provision of financial statements covering periods shorter than a fiscal year, such as quarterly or semi-annually, to give a view of the company's ongoing financial position.

Contingent Items

Items on a company's balance sheet that may become assets or liabilities depending on the outcome of future events.

Segment Information

Detailed data about distinct operating segments of a company, which is often disclosed to provide insights into the performance and prospects of different parts of the business.