Business, 26.01.2022 14:00, Victoriag2626

An investor owns 20% of the outstanding common stock of an investee company, which allows the investor to exercise significant influence over the investee. The Equity Investment was reported at $500,000 as of the end of the previous year. During the year, the investor receives dividends of $50,000 from the investee. The investee reports the following income statement for the year: Revenues $2,000,000
Expenses 1,570,000
Net income $430,000
A. How much equity income should the investor report in its current year income statement?
B. What amount should the investor report for the equity investments in its balance sheet at the end of the year?
C. Assume the fair value of the investee company is $2.1 million at the end of the year. How should the fair value of the investee company be reflected in the investor's financial statements?

Answers: 3

Show answers

Other questions on the subject: Business

Business, 21.06.2019 17:20, pauliavargas4184

Which of the following is a disadvantage of equity alliances when compared to non-equity alliances? 1. they are reflective of weaker ties between firms.2. they do not permit the exchange of explicit knowledge.3. they are more likely to bring about lack of trust and commitment.4. they require significantly higher levels of investment.

Answers: 2

continue

Business, 22.06.2019 11:00, 1129682

Factors like the unemployment rate, the stock market, global trade, economic policy, and the economic situation of other countries have no influence on the financial status of individuals. true or false

Answers: 1

continue

Business, 22.06.2019 16:30, tadams9922

Penelope summers received certain income benefits in 2018. she received $1,400 of state unemployment insurance benefits, $2,000 from a federal unemployment trust fund and $3,700 workers’ compensation received for an occupational injury. what amount of the compensation must penelope include in her income

Answers: 1

continue

Business, 22.06.2019 17:00, Ididntwanttomakethis

Aaron corporation, which has only one product, has provided the following data concerning its most recent month of operations: selling price $ 102 units in beginning inventory 0 units produced 4,900 units sold 4,260 units in ending inventory 640 variable costs per unit: direct materials $ 20 direct labor $ 41 variable manufacturing overhead $ 5 variable selling and administrative expense $ 4 fixed costs: fixed manufacturing overhead $ 64,200 fixed selling and administrative expense $ 2,900 the total contribution margin for the month under variable costing is:

Answers: 2

continue

Do you know the correct answer?

An investor owns 20% of the outstanding common stock of an investee company, which allows the invest...