QUESTION 4 Huge pays $10,000,000 and buys 30% of Minor on Jan.1, Year 1. Huge accounts...
QUESTION 4
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Huge pays $10,000,000 and buys 30% of Minor on Jan.1, Year 1. Huge accounts for this investment using the equity method. During Year 1, Minor has total net income of $400,000 and pays total dividends, to all it shareholders, of $100,000. Huge’s investment in Minor at the end of Year 1 is:
a. $10,400,000
b. $10,120,000
c. $10,090,000
d. $10,000,000
Homework Answers
Correct answer
B $10,120,000
Given
Huge pays $10,000,000 and buys 30% of Minor on Jan.1, Year 1. Huge accounts for this investment using the equity method. During Year 1, Minor has total net income of $400,000 and pays total dividends, to all it shareholders, of $100,000.
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QUESTION 4
Huge pays $10,000,000 and buys 30% of Minor on Jan.1, Year 1.
Huge accounts...
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