Answered: 2. 18,000 shares (representing 9%) of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

M.T. Glass, Inc. purchased the following investments on
January 1, 2028:

1. 21,000 shares (representing 42%) of AA Company stock
for $546,000

2. 18,000 shares (representing 9%) of ZZ Company stock
for $306,000

AA Company and ZZ Company reported the following information
for the years 2028 and 2029:

2028:
AA Company ZZ Company
Net income $140,000 $225,000
Total dividends paid $ 78,000 $ 53,000
Market value at Dec 31 $33 per share $22 per share

2029:
AA Company ZZ Company
Net income $210,000 $280,000
Total dividends paid $ 90,000 $125,000
Market value at Dec 31 $35 per share $23 per share

Calculate the amount of dividend revenue shown in M.T. Glass,
Inc.'s 2029 income statement for these two investments.