Question: As a long term investment at the beginning of the year

As a long-term investment at the beginning of the year, Acquisitions, Inc., purchased 3 million shares (30%) of Takeover Target’s 10 million shares outstanding for $ 52 million. During the year, Takeover Target earned net income of $ 9 million and distributed cash dividends of $ 0.50 per share.

Required:
Record for Acquisitions, Inc., the purchase of the investment and its share of Take-over Target’s net income and dividends using the equity method.


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  • CreatedJuly 15, 2014
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