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?
