Solution-What was Demo Net Income, On 1/1/21, Vitale Co.

What was Demo Net Income

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Reference no: EM132598144

Question - On 1/1/21, Vitale Co. invested $1,000,000 in Demo Co. for 25% of its outstanding stock. The equity method of accounting is appropriate. Demo Co. pays out 40% of net income in dividends each year.

Vitale received $50,000 in Demo dividends during 2021. What was Demo's 2021 Net Income?

a. $500,000

b. $125,000

c. $87,500

d. $156,250

e. $111,111

Reference no: EM132598144

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What was Demo Net Income

Reference no: EM132598144

Reference no: EM132598144

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