Concept explainers
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On 1/18/20, Ehrlich Inc. purchased 30,000 shares of the common stock of XYZ Co. for $16 per share. Ehrlich’s ownership represents 10% of XYZ’s total shares.
On 6/15/20, XYZ Co. paid dividends of $3.00 a share.
On 12/31/20, the fair market value of the XYZ stock was $20 a share.
On 3/3/21, Ehrlich sold 10,000 shares of XYZ stock for $21 per share.
On 6/15/21, XYZ Co. paid dividends of $3.50 a share.
On 12/31/21, the fair market value of the XYZ stock was $21 per share.
Instructions:
Prepare the 6
AND determine the amount of the investment in XYZ that would be shown on the
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