Homework Answers
Cost of Investment = $6 million = 25% of interest in Ketchum corp
Total Fair value of Ketchum corp = $24 millions
Add : intangible assets = $2 millions
Total value of Ketchum corp = $26 millions
Net Income = $ 900000
Comprehensive loss = $30000
Dividend paid = $240000
1. Investment in Ketchum corp Dr. $6 millions
To Bank $ 6 millions
( Being investment purchased)
2. Minority interest Dr. $225000
To profit and loss A/c $225000
(Being profit of Ketchum corp recognize)
3. Other comprehensive income Dr. $7500
To Minority interest $7500
( Being other comprehensive loss recognized)
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