Homework Answers
Calaculation of income from the investment that should be reported in income statement by Howdy Doody corporation:
The correct option is
- $11970
Explanation:
Given
Investment share in Ranger corporation = 18%
Total dividends declared & paid by Ranger company = $66500
The income to be reported in income statement
= Dividend income from investment
= $66500 × 18%
= $11700
Note:
- The increase in fair market value of investment is an unrealized gain and should not reported a income in income statement.
- There is no share in net income of ranger company since the investment holding percent is below 20% which implies that there have no significant influence over the ranger company.
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