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Determine the book value of the investment

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Point 1: On January 2, 2018, All Good Company purchased 9,000 shares of the stock of Big Bad Company, and DID obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $16 per share, and represents a 30% ownership stake. Big Bad Company made $500,000 of net income in 2018, and paid dividends to All Good Company of $40,000 on December 15, 2018. Big Bad Company's stock was trading on the open market for $15 per share at the end of the year.

Question 1: Use this information to determine the book value of the investment that should be reported at year end by All Good Company.

Reference no: EM132480476

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