On January 2, 2018, All Good Company purchased 13,000 shares of the stock of Big Bad Company, and DID NOT obtain significant influence. The investment is intended as a long-term investment.
On January 2, 2018, All Good Company purchased 13,000 shares of the stock of
Big Bad Company, and DID NOT obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $18 per share, and represents a 10% ownership stake. Big Bad Company made $425,000 of net income in 2018, and paid dividends to All Good Company of $7,500 on December 15, 2017. On December 31, 2017, Big Bad Company’s stock was trading on the open market for $13.50 per share at the end of the year. What is the unrealized gain or loss on the investment that should be reported at year end by All Good Company?
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