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On January 1, Big Company acquires all of the common stock of Little Company by...

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Accounting

On January 1, Big Company acquires all of the common stock of Little Company by issuing 400,000 shares of $1 par value stock with a market value of $12 per share. Little reports earnings of $864,000 and pays dividends of $240,000 in the year of acquisition. The amortization of allocations related to the investment was $48,000. Bigs net income, not including the investment, was $6,360,000, and it paid dividends of $400,000. On the consolidated financial statements, what amount is reported for Equity in Little Companys Earnings?

image Multiple Choice $1,056,000 $864,000 $816,000 $240,000 0

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