Question

. On January 1, 2018, Nana Company paid $100,000 for 10,000 shares of Mama Company common stock. The ownership in Mama Company is 10% and thus does not have significant influence over Mama Company. Mama reported net income of $52,000 for the year ended December 31, 2018. The fair value of the Mama stock on that date was $45 per share. What amount will be reported in the balance sheet of Nana Company for the investment in Mama at December 31, 2018

Answer 1

s

Step-by-step explanation:

Answer 2

Answer: $450,000

Step-by-step explanation:

It is shown that Nana Company does not have significant influence over Mama Company.

What this means is that Mama's retained earnings, incomes or dividends have no effect on the investment account of Nana in relation to their Mama investment.

The only relevant amount is the fair value of the Mama's stock that Nana owns.

= 10,000 * 45

= $450,000