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Equity method mechanics with other comprehensive income An investor company owns 30% of the outstanding common stock of an investee company, which allows the investor to exercise significant influence over the investee. The Equity Investment was reported at $975,000 as of the end of the previous year. During the year, the investor received dividends of $104,000 from the investee. The investee reports the following income statement for the year: $3,120,000 2,340,000 780,000 130,000 $910,000 Revenues Expenses Net income Other comprehensive income. Comprehensive income a. How much equity income should the investor report in its net income (i.e., as part of the current year income statement)? $0 b. What amount should the investor report for the Equity Investment in its balance sheet at the end of the year? $0

Equity method mechanics with other comprehensive income An investor company owns 30% of the outstanding common stock of an investee company, which allows the investor to exercise significant influence over the investee. The Equity Investment was reported at $975,000 as of the end of the previous year. During the year, the investor received dividends of $104,000 from the investee. The investee reports the following income statement for the year: $3,120,000 2,340,000 780,000 130,000 $910,000 Revenues Expenses Net income Other comprehensive income. Comprehensive income a. How much equity income should the investor report in its net income (i.e., as part of the current year income statement)? $0 b. What amount should the investor report for the Equity Investment in its balance sheet at the end of the year? $0

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 11P: Net Income and Comprehensive Income At the beginning of 2019, JR Companys shareholders equity was as...
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Equity method mechanics with other comprehensive income An investor company owns 30% of the outstanding common stock of an investee company, which allows the investor to exercise significant influence over the investee. The Equity Investment was reported at $975,000 as of the end of the previous year. During the year, the investor received dividends of $104,000 from the investee. The investee reports the following income statement for the year: Revenues Expenses Net income Other comprehensive income $0 $3,120,000 2,340,000 Comprehensive income a. How much equity income should the investor report in its net income (i.e., as part of the current year income statement)? 780,000 130,000 $910,000 $0 b. What amount should the investor report for the Equity Investment in its balance sheet at the end of the year?
Transcribed Image Text:Equity method mechanics with other comprehensive income An investor company owns 30% of the outstanding common stock of an investee company, which allows the investor to exercise significant influence over the investee. The Equity Investment was reported at $975,000 as of the end of the previous year. During the year, the investor received dividends of $104,000 from the investee. The investee reports the following income statement for the year: Revenues Expenses Net income Other comprehensive income $0 $3,120,000 2,340,000 Comprehensive income a. How much equity income should the investor report in its net income (i.e., as part of the current year income statement)? 780,000 130,000 $910,000 $0 b. What amount should the investor report for the Equity Investment in its balance sheet at the end of the year?
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