Use the Following Information to Answer the Question(s) Below

question 31

Multiple Choice

Use the following information to answer the question(s) below.
Bird Corporation purchased an 80% interest in Brush Corporation on July 1, 2010 at its book value, and on January 1, 2011 its Investment in Brush account was $300,000, equal to its book value. Brush's net income for 2011 was $99,000 (earned uniformly) ; no dividends were declared. On March 1, 2011, Bird reduced its interest in Brush by selling a 20% interest, one-fourth of its investment, for $84,000.
-If Bird uses a "beginning-of-the-year" sale assumption, its gain on sale and income from Brush for 2011 will be

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Definitions:

Trading Securities

Securities that are purchased by a company not for long-term investment but rather with the intent to trade for short-term gains.

Available-For-Sale Securities

Financial assets that are intended to be sold before their maturity but are not classified as trading securities.

Investment Account

A financial account held at a financial institution or brokerage that is used to hold securities, stocks, bonds, mutual funds, and other investments.

Equity Method

An accounting technique used for recording investments in associated companies, where the investment's carrying value is adjusted to recognize the investor's share of the earnigns or losses of the investee.