What is the year-end balance of the equity investment

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1. Drummond Co. recently underwent a sell-off of its home gardening and repair subsidiary, Missoula Co., to an independent party.

If Drummond recorded a gain of $94,130 on the carve out and received $128,310 cash for the sale, what are the net assets of Missoula?

A. $128,310

B. $ 94,130

C. $ 34,180

D. $222,440

E. None of the above

2. Champaign Corporation purchases 45% of the common stock of Rockville, Inc. at a purchase price of $21.6 million cash. During the year, Rockville reports net income of $2,960,000 and pays $544,000 of cash dividends. At the end of the year, the market value of Champaign’s investment is $23.7 million.

What is the year-end balance of the equity investment in Rockville?

A. $22,687,200

B. $25,010,000

C. $24,332,500

D. $21,600,000

E. None of the above

Reference no: EM132056668

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