Details of this Paper

E17-13B (Equity Method) Parent Co. invested $5,000,000 in Sub Co. for 30% of its outstanding stock. At the time of the purchase, Sub Co. had a book value of $15,000,000. Sub Co. pays out 75% of net income in dividends each year. Instructions Use the infor

Description

solution


Question

E17-13B (Equity Method) Parent Co. invested $5,000,000 in Sub Co. for 30% of its outstanding stock. At the time of the purchase, Sub Co. had a book value of $15,000,000. Sub Co. pays out 75% of net income in dividends each year.;Instructions;Use the information in the following T-account for the investment in Sub to answer the following;questions.;Investment in Sub Co.;5,000,000;360,000;270,000;(a) How much was Parent Co.?s share of Sub Co.?s net income for the year?;(b) How much was Parent Co.?s share of Sub Co.?s dividends for the year?;(c) What was Sub Co.?s total net income for the year?;(d) What was Sub Co.?s total dividends for the year?

 

Paper#78456 | Written in 18-Jul-2015

Price : $27
SiteLock