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    Balance in investment: Puckett Company paid $1.6 million for 50,000 shares of Harrison's voting common stock

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    Chapter 1, Problem 4

    On January 1, Puckett Company paid $1.6 million for 50,000 shares of Harrison's voting common stock, which represents a 40 percent investment. No allocation to goodwill or other specific account was made. Significant influence over Harrison is achieved by this acquisition. Harrison distributed a dividend of $2 per share during the year and reported net income of $560,000. What is the balance in the Investment in Harrison account found in the financial records of Puckett as of December 31?

    a. $1,724,000
    b. $1,784,000
    c. $1,844,000
    d. $1,884,000

    Please show calculation, thanks.

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    Solution Preview

    Chapter .1.
    Problem 4

    Suggested answer to the problem is a $1,724,000
    The cost of investment of Puckett is ...

    Solution Summary

    Discussion guides you through the steps and computation.

    $2.19

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