On January 1, 20X8, William Company Acquired 30 Percent of EGate

question 49

Multiple Choice

On January 1, 20X8, William Company acquired 30 percent of eGate Company's common stock, at underlying book value of $100,000. eGate has 100,000 shares of $2 par value, 5 percent cumulative preferred stock outstanding. No dividends are in arrears. eGate reported net income of $150,000 for 20X8 and paid total dividends of $72,000. William uses the equity method to account for this investment.
-Based on the preceding information,what amount would be reported by William Company as the balance in its investment account on December 31,20X8?

• A) $100,000
• B) $123,400
• C) $120,400
• D) $142,000

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Definitions:

Massachusetts Bay Colonists

The settlers of the Massachusetts Bay Colony, an English settlement on the east coast of North America in the 17th century.

New England Indians

Indigenous peoples living in the region known as New England, in the northeastern United States, prior to and during European colonization.

1630-1640

A decade during which significant migration to the American colonies occurred, particularly by Puritans to Massachusetts, marking a crucial development phase of early American society.

Chesapeake Region

An area surrounding the Chesapeake Bay, encompassing parts of Maryland and Virginia, significant in early American history for its tobacco cultivation and as a center of colonial society.