Equity Investment Brown Corporation earns $720,000 and pays cash dividends of $240,000 during 2018. Dexter Corporation owns 3,000 of the 10,000 outstanding shares of Brown. Required: a. What valuation method should be used to account for the above-referenced equity securities? b. How much investment income should Dexter report in 2018? c. What amount should Dexter show in the investment account at December 31, 2018 if the beginning of the year balance in the account was $960,000?

Answer rating: 100% (QA)

1 equity method this method is used when an investor entity ... View the full answer