Question

On January 1, 2021, Nana Company paid $100,000 for 7,500 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 $52,000 for the year ended December 31, 2021. The fair value of the Papa stock on that date was $53 per share. What amount will be reported in the balance sheet of Nana Company for the investment in Papa at December 31, 20

Answer 1

Answer: $397500

Explanation:

The amount will be reported in the balance sheet of Nana Company for the investment in Papa at December 31, 2021 would be gotten by multiplying the number of shares that.weee being held by Nana Company by the fair value for each share. This will be:

= 7500 × $53

= $397500