Homework Answers
1. Full Equity Income is $3,000 and the adjustment to opening balance 2021 retained earnings is $1,500.
2. Cost Method Income is $1,500 and the adjustment to opening balance 2021 retained earnings is $0.
Explanation:
1. In equity method, the holding company records its holding shares as investment. Profits and loss increase the value of investment and paying out dividends decreases the amount of investments.
2. In cost method, the investor reports the cost of investment as asset. When Dividend is received, it is recognized as income and no impact of net income of the subsidiary is considered in the books of holding company.
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this is the answers i need help figuring out how they got the numbers thank you....
this is the answers i need help figuring out how they got the
numbers thank you. !
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this is the answers i need help figuring out how they got the
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