Question

Company E reports net income of $100,000 for 2011. Assume the income is earned evenly throughout the year. Dividends of $10,000 are paid on December 31. What will Company R report as investment income under the following ownership situations, if:
a. Company R owns a 10% interest from July 1 to December 31?
b. Company R owns a 10% interest from January 1 to June 30 and a 25% interest from July 1 to December 31?
c. Company R owns a 30% interest from January 1 to June 30 and a 10% interest from July 1 to December 31?


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  • CreatedApril 13, 2015
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