On January 2, 2021, Howdy Doody Corporation purchased 15% of Ranger Corporation's common stock for $80,000. During 2021, Ranger had net income of $120,000 and declared and paid a dividend of $40,000. On December 31, 2021, the fair value of the Ranger stock owned by Howdy Doody had increased to $90,000. How much should Howdy Doody show in the 2021 income statement as income from this investment? Answer: $

Matthew, Inc., owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee's operations and decision making. On January 1, 2021, the balance in the Investment in Lindman account is $422,000. Amortization of excess fair value associated with the 30% ownership is $15,000 per year. In 2021, Lindman earns an income of $138,000 and declares cash dividends of $46,000. Previously, in 2020, Lindman had sold inventory costing $35,000 to Matthew for $50,000. Matthew consumed all but 25 percent of this merchandise during 2020 and used the rest during 2021. Lindman sold additional inventory costing $42,900 to Matthew for $65,000 in 2021. Matthew did not consume 40 percent of these 2021 purchases from Lindman until 2022. a. What amount of equity method income would Matthew recognize in 2021 from its ownership interest in Lindman? b. What is the equity method balance in the Investment in Lindman account at the end of 2021? a. b. Equity…

Bloomfield Bakers accounts for its investment in Clor Confectionary under the equity method. Bloomfield carried the Clor investment at $150,650 and $165,150 at December 31, 2020, and December 31, 2021, respectively. During 2021 Clor recognized $75,250 of net income and paid dividends of $20,150. Assuming that Bloomfield owned the same percentage of Clor throughout 2021, its percentage ownership must have been: (Round your answer to the nearest whole percent): Multiple Choice 19%. 26%. 24%. 72%.

On January 1, 2021, an investor company acquired 25% of an investee company's common stock for $2,880,000. As a result of this transaction, the investor can exert significant influence over the investee. During each year ended December 31, 2021 and 2022 the investee reported $576,000 of net income and $240,000 of dividends. On January 1, 2021, the book value of the investee's net assets was $9,600,000 and all individual net assets had appraised fair values that equaled their reported book values. On December 31, 2022, what is the balance of the Equity Investment account on the Investor's balance sheet? Select one: a. $3,048, 000 b. $2,880,000 c. $3,552,000 d. $2,964,000