Find what amount should be balance of investment in pen inc

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Faye Co. owned 20% of Pen Inc.'s preference share capital and 50% of the ordinary share capital. Pen Inc.'s share capital outstanding comprised the following at year-end:

10% cumulative preference share capital - 2,000,000
Ordinary share capital - 7,000,000
Pen Inc. reported net income of $5,000,000 for the current year.

Problem 1: Assuming that the preference share capital of Pen Inc. are non-cumulative and that Pen Inc. paid $1,000,000 cash dividends for the current year. What amount should be the balance of Investment in Pen Inc. at the end of the end of the current year?

Reference no: EM132822977

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