On June 1, 2018, Blue Co. distributed to its common stockholders 200,000 outstanding common shares of its investment in Red Inc, an unrelated party. The book value on Blue's books of Red's $1 par common stock was $2 per share. Immediately after the declaration, the market price of Red's stock was $2.50 per share. In its income statement for the year ended June 30, 2018, what amount should Blue report as gain before income taxes on disposal of the stock?
A) $0.
B) $100,000.
C) $400,000.
D) $500,000.
Correct Answer:
Verified
Q66: When preferred stock is purchased by the
Q67: When treasury shares are resold at a
Q68: Montgomery & Co., a well-established law firm,
Q69: When treasury shares are sold at a
Q70: The retained earnings balance reported in the
Q72: Preferred stock is called preferred because it
Q73: Treasury shares are most often reported as:
A)
Q74: Any dividend that is considered to be
Q75: Retained earnings represent a company's:
A) Undistributed net
Q76: Coy, Inc. initially issued 200,000 shares of
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents