4 wader 39 s corporation paid 120 000 for a 25 interest in shell company on july 1 2 4307700

4 wader 39 s corporation paid 120 000 for a 25 interest in shell company on july 1 2 4307700

4) Wader's Corporation paid $120,000 for a 25% interest in Shell Company on July 1, 2010. No information is available on the fair value of Shell's assets and liabilities. Assume the equity method. Shell's trial balances at July 1, 2010 and December 31, 2010 were as follows:

DebitsDecember 31July 1

Current assets$100,000$50,000

Noncurrent assets300,000310,000

Expenses160,000120,000

Dividends (paid in June)     40,000     40,000

Total$ 600,000$ 520,000

Credits

Current Liabilities$60,000$40,000

Capital stock (no change)200,000200,000

Retained earnings Jan. 1100,000100,000

Sales  240,000  180,000

Total $600,000$520,000

Required:

1.What is Wader's investment income from Shell for the year ending December 31, 2010?

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