What amount should Carla Vista include in income statement

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Reference no: EM132721756

Question - Carla Vista, Inc. acquired 40% of Kingbird Corporation's voting stock on January 1, 2021 for $1070000. During 2021, Kingbird earned $421000 and paid dividends of $264000. Carla Vista's 40% interest in Kingbird gives Carla Vista the ability to exercise significant influence over Kingbird's operating and financial policies. During 2022, Kingbird earned $521000 and paid cash dividends of $164000 on April 1 and $164000 on October 1. On July 1, 2022, Carla Vista sold half of its stock in Kingbird for $681000 cash.

Before income taxes, what amount should Carla Vista include in its 2021 income statement as a result of the investment?

a. $264000.

b. $168400.

c. $105600.

d. $421000.

Reference no: EM132721756

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