Benjamin, Inc. bought 30% of Hoover Corp.s outstanding common stock on January 2, 2018, for...
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Benjamin, Inc. bought 30% of Hoover Corp.s outstanding common stock on January 2, 2018, for $600,000. The carrying amount of Hoover net assets at the purchase date totaled $1,600,000. Fair values and carrying amounts were the same for all items except for plant, for which fair values exceeded their carrying amounts by $100,000. The plant has a ten-year life. During 2018, Hoover reported net income of $300,000 and paid a $50,000 cash dividend. Assume that Benjamin uses the equity method to account for this investment. What amount should Benjamin report its investment in Hoover in December 31, 2018 balance sheet?
a) $600,000. b) $624,000. c) $672,000. d) $690,000.
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