An ownership interest of 15% in another company s voting stock should be accounted for using...
An ownership interest of 15% in another company s voting stock should be accounted for using the:
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cost method. |
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fair value method. |
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consolidation method. |
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equity method. |
"Sunland Company owns 17000 of the 50000 outstanding shares of Taylor, Inc. common stock. During Year 18, Taylor earns $1080000 and pays cash dividends of $870000. If the beginning balance in the investment account was $690000, the balance at December 31, Year 18 should be"
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"$690,000.00 " |
||
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"$761,400.00 " |
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"$900,000.00 " |
||
|
"$1,057,200.00 " |
Homework Answers
1) An ownership interest of 15% in another company s voting stock should be accounted for using the
So answer is b) Fair value method
2) Percentage = 17000/50000 = 34%
Calculate ending balance
| Beginning balance | 690000 |
| Add: Net income (1080000*34%) | 367200 |
| Less: Dividend (870000*34%) | -295800 |
| Ending balance | 761400 |
So answer is b) $761400
Add Answer to:
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