On June 27, 2018, Cara Van Travel distributed to its common shareholders 400,000 outstanding common shares of its investment in Constance Noring Pillows. The book value on Van's books of Noring's $1 par common stock was $2 per share. Immediately after the distribution, the market price of Noring's stock was $2.50 per share. In its income statement for the year ended June 30, 2020, what amount should Noring report as gain on disposal of the stock (ignore taxes)?
A) $0
B) $200,000
C) $800,000
D) $1,000,000

Question

Quizplus · Accepted Answer

Property dividends are recorded at the fair value of the asset distributed as of the date of declaration, with any gain or loss being recognized in the current period. 11ea937b_35b0_5384_a419_f3a6e3a330af_TB2599_00

On June 27, 2018, Cara Van Travel Distributed to Its