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On January 1, 2021, Nana Company paid $100,000 for 8,300 shares of Papa Company common stock. The ownership in Papa Company is 10%. Nana Company does not have significant influence over Papa Company. Papa
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On January 1, 2021, Nana Company paid $100,000 for 8,300 shares of Papa Company common stock. The ownership in Papa Company is 10%. Nana Company does not have significant influence over Papa Company. Papa reported net income of $55,000 for the year ended December 31, 2021. The fair value of the Papa stock on that date was $63 per share. What amount will be reported in the balance sheet of Nana Company for the investment in Papa at December 31, 2021

User Kevin Yang
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6 votes

Answer:

$522,900 will be reported in the balance sheet of Nana Company for the investment in Papa on December 31, 2021

Step-by-step explanation:

The amount That will be reported in the balance sheet of Nana Company for the investment in Papa at December 31, 2021, can be calculated using the following formula

Amount of Investment = Total Numbers of shares x Fair value of Papa stock

Where

Total Numbers of shares = 8,300 shares

Fair value of Papa stock = $63 per share

Placing values in the formula

Amount of Investment = 8,300 x $63

Amount of Investment = $522,900

User Ilia Gilmijarow
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